Macquarie joined the chorus urging caution over cocoa prices building on this week's 2013 highs even as Asian processors forecast a continuation of weak demand for powder from chocolate groups already believed to have high inventories.
Macquarie said that cocoa futures were for now "fairly priced" given the selling likely being undertaken by Ghana and Ivory Coast, the top two producing countries, but against a backdrop of some harvest concerns.
"There should be some consolidation from here on," Macquarie analyst Kona Haque said.
Earlier this week, Commerzbank also warned against betting on tight supplies, while Archer Daniels Midland, unveiled a slide into the red in cocoa processing, said that strong North American grindings data reflected a rise in capacity rather than a rise in underlying demand.
Separately on Friday, the Cocoa Association of Asia flagged another caution to cocoa bulls, saying that a drop of 10.8% to 140,062 tonnes in the Asian cocoa grind in the first quarter of the year was not a one-off.
"Second-quarter grindings will stay negative," said Brandon Tay, the association's chairman, said.
The data will show a year-on-year decline "simply because the demand for cocoa powder is not big enough for grinders to offer it".
The Asian cocoa powder market is being undermined by the hangover of a jump in prices from some about $1,000 in 2009 to $6,000 a tonne last year, fuelled by a hoarding spree which - with prices now collapsed back to $2,200 a tonne – has left many in the industry with high-priced inventories.
The decline in powder values has prompted processors to raise prices of cocoa butter, the other major product of cocoa grinding, to support margins.
But "butter has hit the top", Mr Tan said adding that "there will be resistance for it to go higher".
Macquarie, nonetheless, also advised against overdoing gloom on cocoa prices, given the potential for higher Asian butter prices to support margins, and underpin processing volumes, in other regions too, such as Europe.
European grinders also look set to benefit from a "sharp fall" in processing volumes in Ivory Coast itself, where a minimum price of 725 CFA francs per kilogramme was squeezing margins.
"Having already seen their margins squeezed by higher prices for the main crop, to which are added the costs of transporting beans to the coast, and a change to the export tax regime introduced in November, grinders are reluctant to buy cocoa from Ivorian farmers for processing," Ms Haque said.
World grindings overall were forecast to rise 1.8% in 2012-13 and 2.2% next season.
Furthermore, prices may get a lift from a reduction in sales by Ghana and Ivory Coast, which may already have sold forward 40-50% of its 2013-14 crop.
"At today's prices of over $2,400 a tonne, we expect more origin selling, which will help correct prices in May.
"But what this also implies is pressure from origin sales in the second half of the year will be reduced."
A drop in origin selling, coupled with higher grindings, "should see the path of least resistance [for prices] move upwards from the third quarter onwards".