Cocoa processing in Europe and Asia exceeded expectations by wide margins in the third quarter, signaling a potentially stronger-than-anticipated recovery in global demand after years of elevated chocolate prices.
In Europe, the world’s biggest cocoa-consuming region, the amount of beans ground into butter and powder rose 3.2% from a year earlier, the first year-on-year increase for any quarter since 2024, according to the latest data from the European Cocoa Association. Asia processed more of the crop than any quarter on record going back to 2011, with grindings jumping 29% from the same period last year, according to the Cocoa Association of Asia. Both regions beat every estimate in a Bloomberg survey.
New York cocoa futures finished 1.7% higher, for a fourth straight day of increases. Shares in chocolate-makers that had plunged earlier this year on fears of long-term demand destruction also traded sharply higher, with Lindt & Sprüngli and Barry Callebaut AG posting their biggest gains in months. After the market close, data showed North American cocoa grinds falling 2.5% from the same quarter last year, though results were skewed by two fewer plants answering the industry survey.
The recovery likely reflects improved profit margins for processors thanks to lower cocoa prices as well as a gradual improvement in demand, according to Priyanka Sachdeva, head of market insights at Phillip Nova Pte. Ltd. in Singapore. However, cocoa prices remain significantly above historical norms amid El Niño weather concerns in West Africa.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing