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Cocoa grind margins on the up, Barry Callebaut says

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Cocoa processing margins are on the rise, Swiss chocolate maker Barry Callebaut said, as it forecast its sales volumes to increase from April of this year.

The company saw its total sales volumes edge down, thanks to a planned withdrawal of its less profitable cocoa delivery contracts.

But chief executive Antoine de Saint-Affrique said "we have good visibility on volume growth and expect acceleration in the second half of the fiscal year".

Barry Callebaut confirmed its guidance for cocoa volumes growing by 4-6% through 2017-18.

Shares opened up 1.7%, but trimmed gains, up 0.2% on the day in afternoon deals, at 1,236.00 Swiss francs.

Rising margins

Cocoa grinding margins are trending upward, but the industry has seen recent setbacks, Barry Callebaut said.

The company saw the saw an improvement in the combined ratio, the value of cocoa butter and powder compared to that of unprocessed cocoa beans.

"The combined ratio is heading in the right direction, though volatility remains high," the company said.

"After a significant recovery at the end of October 2016, the combined cocoa ratio again experienced a downturn; however, it is still at a higher level compared to the prior year."

Chocolate volumes rise, cocoa falls

Barry Callebaut saw sales volumes fall as part of a planned rationalisation of its cocoa business, but chocolate volumes rose, and the company expects rising sales by the second half of the year.

Sales volumes dipped 0.4% year on year, to 492,931 tonnes in the September to November period.

Revenues rose 4.2%, to 1.89bn, ahead of analyst expectations.

Outpacing the market

Barry Callebaut managed to grow chocolate sales volumes in Europe and the Americas, despite the fact that total chocolate demand fell in those regions.

The company's sales volume in Europe, Middle East, Africa rose 2.2% to 225,087 tonnes.

And sales in the Americas rose 1.4%, to 113,112 tonnes.

Sales in the Asia Pacific region grow faster, with volumes up 8.8%, at 22,544 tonnes.

By William Clarke

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