Cocoa futures eased after European cocoa processing volumes showed
a surprise decline to the lowest in two years, with fears of a further drop in prices
if statistics from other regions turn out weak.
Grindings in European cocoa processing plants fell 0.7% year
on year to 307,938 tonnes in the April-to-June quarter, the European Cocoa
The figure was the lowest since the same quarter of 2012,
and came in short of market expectations of a rise of 2-3% in volumes.
"A further slowdown had been expected, given the low processing margins, but grinding has nevertheless proved somewhat lower than envisaged," Commerzbank said.
Cocoa futures for September delivery stood 0.9% lower at $3,058
a tonne in New York at 07:45 local time (12.45 UK time).
London's September contract stood down 0.6% at £1,901 a
tonne, falling earlier to £1,897 a tonne, its first foray below £1,900 a tonne in
"The data was disappointing," a European soft commodities
investor told Agrimoney.com.
'One piece in the
Prices may be open to a further decline if upcoming data
expected on Asia's cocoa grindings proves weak, the investor added.
"There is a question over how much of this decline is down
to processors shifting activity from Europe to origin countries. The European
data are only one piece in the jigsaw."
Groups such as Olam International are raising cocoa
processing capacity in cocoa growing countries such as Ivory Coast and
Indonesia, encouraged by growth in chocolate consumption in developing markets.
"When we see the Asian data, we will have more of an idea of
what is going on," the investor said.
Processing volumes are also being curtailed worldwide by a
weak market for cocoa powder, one of main products, with butter, from
While margins from producing cocoa butter, a major ingredient
of chocolate bars, remain strong, those from powder, used in ice cream and
biscuits, are at their weakest in more than a decade, processor Barry Callebaut said last week.