Euromar Commodities GmbH, the European unit of cocoa processor Transmar Group, delivered some cocoa into the expired May futures contract on NYSE Liffe in London after slowing its factory in Fehrbellin, Germany.
Euromar slowed processing capacity “significantly,” resulting in excess cocoa beans, Peter G. Johnson, president of parent company Transmar in Morristown, New Jersey, said in an e-mail in response to Bloomberg questions. The slowdown was due to a drop in the so-called combined ratio, an indication of a grinder’s profitability, he said. The German factory has capacity to process 100,000 metric tons of cocoa a year.
“Transmar/Euromar delivered cocoa to the terminal market to manage inventory levels,” Johnson said. “With the combo ratio in negative territory, Euromar has slowed significantly its processing capacity, creating excess raw material supply.”
The combined ratio in Europe fell 7.8 percent this year to 3.2 on May 10 because of lower prices for cocoa powder, used to make cookies and ice cream, data from KnowledgeCharts, a unit of cocoa researcher Commodities Risk Analysis in Bethlehem, Pennsylvania, show. That compares with 3.47 on Dec. 28 and this year’s low of 3.05 on March 29. The combined ratio corresponds to the price of byproducts cocoa butter and cocoa powder relative to the bean futures on NSYE Liffe.
The total delivery on the exchange was 34,530 tons, according to data on the NYSE Liffe’s website today. That is 37 percent of the inventories with a valid grading certificate in warehouses monitored by the bourse. Beans delivered against the March contract came to 72,350 tons and in May last year the total was 44,010 tons, data on the exchange’s website showed.
Sucres et Denrees SA took all of the beans delivered against the May futures, according to Derek Chambers, head of cocoa at the Paris-based trading company. Johnson declined to comment on what tonnage was sold by Transmar. Brokers Jefferies Bache Ltd., Newedge U.K. Financial Ltd. and ABN AMRO Clearing Bank NV delivered beans on behalf of clients, NYSE Liffe data showed.