
Cocoa processing rates in Europe and Asia saw a downturn during the last quarter of 2024, indicating that chocolate manufacturers are grappling with surging costs and shrinking stockpiles.
According to data published on Thursday, Europe recorded a 5.4% decrease in cocoa bean processing, while Asia saw a minor decline of 0.5% compared to the same period last year. The fourth quarter grindings in both areas marked the lowest levels since 2020, a time when the chocolate sector was adversely affected by Covid-19 lockdowns and trade disruptions.
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“The decline in grindings across both regions points to a lack of strong demand,” remarked Steve Wateridge, head of research at TRS by Expana. “At the current price levels, this is not particularly surprising.”
On Thursday, cocoa futures in New York decreased by as much as 3.4%, and the most-active contracts in London fell by up to 2.8%.
Last year, cocoa prices nearly tripled, making it the top-performing major commodity, as persistent supply shortages from Ivory Coast and Ghana—leading global producers—resulted in an unprecedented supply gap. As a result, chocolate companies have restricted their cocoa usage in products and are depleting their inventories to meet ongoing chocolate demand.
The latest findings reveal that total cocoa grindings in Europe, the largest market globally, have experienced declines for the second consecutive year. Conversely, Asia reported a small increase in overall grindings for 2024. Data from North America, released after market hours on Thursday, indicated a year-over-year decrease of 1.2% in grindings.
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While grinding data—representing the conversion of cocoa into butter and powder for various products, from candy bars to ice cream—has typically served as a gauge of demand, current tight supply conditions have diluted this relationship. Still, markets are closely watching these statistics in anticipation of an even sharper drop as chocolate makers confront the expensive task of restocking inventories.
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