The rally in cocoa futures stalled after Malaysia, the top
Asian processor of the bean, revealed that its volumes had fallen for a third
successive quarter, questioning ideas of a revival in world demand.
Malaysian cocoa crushers ground 71,150 tonnes of the bean in
the July-to-September quarter, down 3.1% year on year, the Malaysian Cocoa Board
The figure took to 215,544 tonnes the volume processed in
the first nine months of 2013, also down 3.1% year on year, and questioning expectations
of a sustained recovery in volumes from a low of 279,288 tonnes reached in
calendar 2009 as the world economic crisis took hold.
In fact, Malaysia has not come close to matching the 323,
653 tonnes set in 2008.
'Foot off the gas'
"It looks like Malaysian processors have taken their foot
off the gas," a UK trader told Agrimoney.com.
"The strengthening we have seen in demand over here does not
look like it has been replicated there," a factor which may be down to a
continuing effort to shift cocoa powder, whose price has tumbled this year in
part thanks to the extent of stocks built up by Asian buyers last year.
European cocoa powder prices have halved from the levels of
nearly $4,000 a tonne at which they entered 2013, according to the
International Cocoa Organization.
Asian demand is seen as weighted towards cocoa powder, as
used in making chocolate ice cream and biscuits, rather than the cocoa butter
used in making chocolate, and particularly popular in Europe.
Indeed, European cocoa butters prices, which entered the
year at parity with powder, have soared above $7,000 a tonne – a rise seen as
tallying with data last week showing the region's third-quarter cocoa grind
rising by 4.7%.
Data to come
Monday's data "raise the importance" of further data, on the
Asian and North American cocoa grinds for the July-to-September quarter, in proving
ideas of strengthened demand, the trader said.
The North American statistics are expected on Thursday, with
a date for the Asian data yet to be scheduled.
Cocoa for December stood 1.3% lower at £1,756 a tonne in afternoon
deals in London, where the contract on Friday set a two-year high for a spot
lot of £1,781 a tonne.
In New York, December cocoa managed to hit $2,757 a tonne in
early deals, the highest for a spot contract since September 2011, before
falling back to $2,714 a tonne down 1.2% on the day.