Cocoa prices could rise as Chocolate demand picks up in Europe
Chocolate demand appears to be roaring back in Europe as easing Covid-19 restrictions encourage consumers to buy more treats again.
Cocoa processing — where beans are turned into products used in confectionery — jumped 14% in the second quarter from a year earlier, when grindings slumped early on in lockdowns. That was much more than projected in a Bloomberg survey and marked the largest volume for that quarter in more than a decade.
Grindings in the world’s biggest consuming region suggest consumption is continuing to rebound as life starts to return to normal, aiding spending in stores, restaurants and airports. Figures due later this week are also expected to show an increase in processing in Asia and North America. Cocoa futures were slightly lower in New York on Tuesday, after capping the biggest gain this year on signs chocolate demand is recovering.
The European grinding data reflects “a recovery from the depths of the ravages of Covid last year,” said Jonathan Parkman, deputy head of agriculture at Marex, adding that he’s slightly increased estimates for processing. Europe has also been picking slack from Ivory Coast grinders who were affected by power outages, he said.
Cocoa lost 0.2% to $2,425 a ton in New York, after jumping 3.5% on Monday, the most since December. Futures were little changed in London. Prices have been pressured this year amid an outlook for a global oversupply.
In other soft commodities, raw sugar eased for a sixth day to touch the lowest in two weeks, and arabica coffee also edged lower.