By Alexandra Wexler
NEW YORK--North American cocoa grindings in the second quarter
fell short of expectations, tumbling 9.8% from the same period a
year earlier.
Total North American grindings fell by 12,202 metric tons to
112,768 tons of beans in the April-June period from 124,970 tons in
the year-earlier period, the Washington-based National
Confectioners Association said Thursday.
The market had expected a decrease of about 4% to 6% in
grindings, or the tonnage of cocoa beans ground into powder, which
is viewed as a measure of demand for chocolate. However, grindings
data were collected from 17 plants in Canada, the U.S. and Mexico,
versus 19 plants last year, which could account for a portion of
the decline in tonnage.
The percentage decrease was reminiscent of the 18% drop in
second-quarter grindings reported by the European Cocoa Association
last week--the sharpest decline in 12 years for a quarter compared
to the previous year's quarter. Europe is the world's largest
per-capita consumer of chocolate.
Asian cocoa grindings were also released Thursday. For the
second quarter of 2012, grindings increased by 5.7% from the same
period a year earlier, the Cocoa Association of Asia said.
Asian grindings increased by 8,147 tons, to 150,726 tons of
beans from 142,579 tons in the year-earlier period, according to
CAA data.
The U.S. and Asian data should give some direction to prices on
the ICE Futures U.S. exchange in New York. Volume has been low over
the past week as investors sat out ahead of the grindings
figures.
Cocoa for September delivery on ICE settled Thursday at $2,230 a
ton, up 1.2% on the day.
"I'm trying to be a little bit friendly to cocoa down here,"
said Drew Geraghty, a broker at ICAP Futures. "For the most part I
think [grindings are] going to be a one-day event."
Prices have been rangebound between approximately $2,050 and
$2,450 a ton this year as investors weigh the supply and demand
situation. Earlier this month, futures rallied as high as $2,375 a
ton on concerns over hot, dry weather in top-producing region West
Africa, but then fell as low as $2,159 a ton two weeks later when
concerns about demand arose on the back of the European
cocoa-grinds figures.
Companies that reported data for the North American cocoa grind
included Archer Daniels Midland Co. (ADM), Hershey Co. (HSY),
Blommer Chocolate Co., Mars Inc., Cargill Inc. and Ghirardelli
Chocolate Co.
Write to Alexandra Wexler at alexandra.wexler@dowjones.com.
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