UPDATE: Cocoa Prices Rise On Record European 3Q Grind Data

Cocoa prices climbed Thursday after data showing European cocoa demand rose 14% to a record high for a three-month period in the third quarter of 2011.

European cocoa grindings, a key measure of demand for the chocolate ingredient, increased to 377,388 metric tons, data from the from the European Cocoa Association showed Thursday. That's up from 354,543 in the previous quarter and the highest quarterly figure since records began in 1999-2000.

In Germany, the region's largest processor, grindings jumped a massive 36% compared with the same three months in 2010 to 126,288 metric tons, the association of German confectionery producers said.

The data are "the highest I've ever seen and the highest in at least a decade, possibly ever," said Keith Flury, soft commodities analyst at Rabobank.

Cocoa grindings in Europe, a key measure of demand for the chocolate ingredient, have been running sharply ahead of last year after a slump during 2010. But the data still surprised the market, sending cocoa futures for December delivery on London's NYSE Liffe Exchange up 1.6% to GBP1,714/ton.

Flurry said the data were likely due to the cessation of processing activity in top producer Ivory Coast when civil war erupted there earlier this year and continued demand from emerging markets, including Asia and Eastern Europe. He expects demand to rise to a record high of 3.9 million tons in 2011-12.

In the second quarter, European grindings rose by 8% compared with the same period of 2010, the ECA said, although it revised down its estimate to 354,543 tons from an initial 355,593 tons. Grindings also increased by 3.7% in the first quarter of 2011 relative to the year before, marking the first increase in six months.

The ECA accounts for around two-thirds of European cocoa grindings. ECA grinding members are ADM Cocoa, a unit of Archer Daniels Midland Co. (ADM); Barry Callebaut AG (BARN.EB); Delfi Cocoa Europe, a division of Petra Foods Ltd. (P34.SG); ECOM/Dutch Cocoa; and Gerkens Cacao, a unit of Cargill Inc.

Bean processors are Cioccolato Peyrano, Euromar, Ferrero SpA, Fuchs & Hoffmann, Hachez, Herza, Icam, Kessko, Kraft Foods Inc. (KFT), Lindt (Italy), Ludwig, Majani, Natra, Nederland, Nestle SA (NESN.VX), Schokinag, Schwartauer Werke, Stabilimento Testa, Storck, Weinrich and Toms.

-By Caroline Henshaw, Dow Jones Newswires; 4420-7842-9478; caroline.henshaw@dowjones.com

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