Barry Callebaut forecast that cocoa prices, whose volatility left
the chocolate giant's sales some SFr130m below investor expectations in the latest
quarter, would remain at the lower end of the trading range which has dragged
them to a nine-month low.
The Swiss-based group, the world's biggest manufacturer of
chocolate and cocoa products, flagged that cocoa beans had averaged 20% lower
over the past year than in 2011.
While cocoa futures topped £1,700 a tonne in early September
- "due to uncertainties with regards to the main crop as well as the cocoa
reform in Ivory Coast", the top producer of the bean, which has brought crop marketing
under a single regulator – prices fell to £1,414 a tonne last week, their
weakest since April.
"Short-term, we expect cocoa prices to trade on the low side
of the well-settled range of the past 12 months," the group said.
That implies values well below levels of 2011, let alone of
2010 when London futures topped £2,700 a tonne, hitting their highest since
Cocoa prices have fallen back thanks to the refill to world
supplies provided by a world surplus in 2011-12, waning ideas of a deficit
forecast for this season, and thanks to a less disruptive start to Ivory Coast cocoa
reforms than many investors had expected.
Barry Callebaut, which makes chocolate on behalf of groups
such as Hershey, Kraft and Nestle, blamed movement in cocoa prices from levels
at the time the contracts were struck for a 13.1% to SFr262.9m in revenues at its
global sourcing and cocoa division in the September-to-November.
Growth was also "impact by ongoing expansion at some of the
factories, as well as higher internal demand for cocoa powder, which limited
sales to third parties", the group said.
The decline dragged group revenues 0.6% lower to SFr1.25bn
in the quarter.
Investors had expected a rise of nearly 10% in sales to SFr1.38m.
Ahead of the market
The decline in global sourcing and cocoa division
overshadowed growth in chocolate sales which, in rising 8.3% during the
quarter, "significantly outpaced" a global market which increased by 1.1%, according
Sales in Asia were particularly strong, rising 17.5% by volume,
boosted by a buoyant Chinese market, with Europe seeing volume growth, of 6.2%
despite "a market environment which was still depressed in southern Europe".
Nonetheless, Barry Callebaut shares eased 12.8% to SFr893.50
in morning deals.