Cocoa prices are likely to be “relatively weak” in the current half as slowing economies dent demand for the chocolate ingredient, especially in Europe, according to Ecobank Transnational Inc.
European cocoa-bean processing declined 18 percent in the second quarter to a three-year low, according to figures from the European Cocoa Association. The so-called grind dropped to 292,551 metric tons from 355,763 tons a year earlier, the Brussels-based industry group said in an e-mailed report today.
“Going into the second half of 2012, the improved weather outlook across West Africa and concerns over faltering cocoa demand, especially in Europe, are likely to keep prices relatively weak,” Lome, Togo-based Ecobank said in a report e-mailed today. There are “widespread expectations of a balanced global market in 2012-13,” it said.
Rains last month will help the development of the next crop that starts in October in top producer Ivory Coast, the bank said. The mid-crop, the smaller of two annual harvests that usually starts in April, has been “disappointing” with “poor quality,” the bank said. The 2011-12 crop in Ghana, the second-biggest grower, will be below industry regulator Cocobod’s forecast of 850,000 tons, according to the report.
Coffee prices are likely to strengthen in the coming months, with demand for the robusta variety showing “no signs of flagging” and arabica prices near historical lows, the bank said. Robusta has climbed 11 percent this year in London trading, while arabica is down 20 percent in New York.