Cocoa Grindings in Asia Climb 10% as Chocolate Consumption Grows
Cocoa processing in Asia gained 10 percent in the fourth quarter of 2013 as consumption of chocolate-based confectionery and beverages increased.
The so-called grind, an indication of demand, rose to 170,684 metric tons from 155,237 tons a year earlier, the Singapore-based Cocoa Association of Asia said in an e-mailed statement today. The figures are for Malaysia, members in Singapore and Indonesia and two additional factories in the region, it said. The beans are processed into butter and powder used to make chocolate.
Cocoa jumped 21 percent in New York last year on rising demand in emerging markets led by Asia and concerns dry weather in western Africa will cut output spurred forecasts for another season of global shortage. Chocolate consumption per person in the Asia-Pacific region will double in 2014 from a decade earlier, according to Euromonitor International Ltd. The outlook for the region is attracting cocoa-processing companies including Barry Callebaut (BARN) AG, Hershey Co. and Cargill Inc.
“Fundamentally cocoa is very well-supported,” said Abah Ofon, Singapore-based director of agricultural commodities research at Standard Chartered Plc. Chocolate consumption “is beginning to catch on. This growth in demand that we’re seeing in Asia is in line with what we’ve been seeing in different markets notably in Europe and the U.S.”
Bean processing in Europe, which accounts for about 40 percent of global grindings, rose 6.2 percent to 348,406 tons in the fourth quarter from a year earlier, European Cocoa Association data showed on Jan. 15. Grindings in North America climbed to 125,332 tons in the same period from 120,085 tons, the National Confectioners Association estimates.
Processing in Asia gained 5.4 percent to 639,505 tons in 2013 from 606,622 tons a year earlier, the CAA said.
Cocoa for delivery in March gained 0.2 percent to 1,734 pounds ($2,851) a ton on NYSE Liffe in London today. The contract for delivery in the same month fell 1.9 percent to $2,700 a ton on ICE Futures U.S. in New York on Jan. 17. U.S. markets are closed today for a public holiday.
Bean prices may climb as high as $3,050 a ton on average in the fourth quarter as consumption continues to outpace production, Rabobank International estimates. Cocoa is seen averaging at $2,706 in 2014, Standard Chartered’s Ofon said.
Global chocolate confectionery sales will rise 6.3 percent to a record $117 billion this year, estimates Euromonitor, a consumer research company based in London. In the Asia-Pacific region, home to more than half the world’s population and 12 percent of chocolate demand, each person will eat 200 grams (0.4 pounds) in 2014, double the amount of a decade earlier, according to Euromonitor.
Barry Callebaut, the world’s biggest maker of bulk chocolate, bought the cocoa processing business of Singapore-based Petra Foods Ltd. last year. Hershey, the maker of chocolate Kisses and Reese’s candies, is building a $250 million confectionery plant in Malaysia, while Cargill is investing $100 million to open a cocoa-bean processing plant in Indonesia, the world’s third-largest cocoa grower.
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