European cocoa production falls by over 3% as prices in London hit five-month low
European first-quarter cocoa grind data released (14 April 20201) by the European Cocoa Association reveals the amount of grinding fell by just over 3% compared to the same quarter in the previous year, from 99.6 in 2020-2019 to 97.0 in 2021-2020.
On Monday this week, London cocoa futures on ICE hit a five-month low in expectation of this week's grind data, reinforcing concerns regarding sluggish demand and a production surplus from the main cocoa growing countries.
Cote d’Ivoire cocoa grinders had processed 293,000 tonnes of beans by the end of March, up from 282,000 tonnes over the same period the previous season, data from the exporters' association GEPEX revealed.
The GEPEX data covers six of the largest grinding companies, including Barry Callebaut, Olam International Ltd and Cargill.
At the beginning of the week, London cocoa fell 0.5% to 1,590 pounds per tonne, having hit its lowest since mid-November at $1,586.
Financial news sites reported that dealers said the front month's weakness reflected low demand and rising exchange stocks, with this season's surplus expected to reach between 150,000 and 175,000 tonnes.
The German Confectionery Industry (BDSI) said that 11 of its member companies that take part in the notification procedure with their production facilities, ground a total of 91,482.1 tonnes of cocoa in the first quarter of 2021 - a decrease of 8.1% compared to the corresponding quarter of the previous year.
“Even a year after the start of the coronavirus crisis, the number of grinding operations continues to decline,” it said.