By Katherine Dunn

 

LONDON--The volume of raw cocoa beans processed in Europe rose by 2.9% in the third quarter of 2016 from the same period last year, according to figures released by the European Cocoa Association on Wednesday.

Cocoa grindings in the region rose to 343,935 metric tons in the period from July to September, the Brussels-based ECA said. Grindings figures measure the amount of raw cocoa processed into butter and powder for confectionery and chocolate.

The figures were slightly below expectations from cocoa traders and processors, who had forecast a gain of at least 3% to 4% in the quarter, as cocoa grinding shifted to Europe from West Africa following a weak second crop in the world's top cocoa producing region.

Grinding figures are often used as a proxy for demand, but traders say they can also reflect the placement of factories or the movement of beans.

That was particularly true this year.

Several traders and analysts had predicted a gain due to a smaller harvest and low bean quality in West Africa, the world's top cocoa region, which caused processing to be reassigned to European factories.

This reassignment allowed processors to mix the smaller crop with beans from other origins more easily, and helped grindings rise by 4.9% in the second quarter compared with the previous year.

The numbers are followed by comparable figures in North America, which will be released next Thursday. Asian figures typically follow within a week, but do not follow a set schedule.

The European Cocoa Association represents 20 companies in the European Union and Switzerland, including Barry Callebaut AG (BARN.EB), Cargill Cocoa & Chocolate, Ferrero SpA, Nestle SA (NESN.EB) and Mondelez International Inc. (MDLZ).

 

Write to Katherine Dunn at katherine.dunn@wsj.com.

 

(END) Dow Jones Newswires

October 12, 2016 07:05 ET (11:05 GMT)

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