NSRGY Nestle SA (PK)

   By David Hodari 
 

European processing volumes of raw cocoa beans hit their highest level in at least 17 years at the start of the 2018-19 season, according to data released Tuesday by the European Cocoa Association.

Cocoa grindings--the amount of raw cocoa processed into butter and powder for the manufacturing of confectionary and chocolate--accelerated to 3.3% on-year in the first quarter from 1.6% on-year growth in the fourth quarter. Still, that pace was slower than the 5.5% growth in the first quarter of 2018.

Grindings are interpreted by the market as a proxy for demand.

Despite gentle increases in the second half of the 2017-18 season, annual grindings grew at 4.2% last season to post the strongest rise in cocoa processing since 2010-11.

That looks set to continue this season, with a quarterly grind of 370,359 tons being the highest first-quarter figure since at least 2002.

Weather conditions in western Africa have been broadly conducive to crop growth and port arrivals have remained relatively strong, with first-quarter grindings largely in line with analysts' expectations of traders surveyed by The Wall Street Journal, who expected a pickup in growth after mild expansion at the end of last year.

Grinding numbers for North America provided by the National Confectioners Association, and for Asia from the Cocoa Association of Asia, are expected to be released in the coming weeks.

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

Write to David Hodari at david.hodari@wsj.com

(END) Dow Jones Newswires

April 16, 2019 03:20 ET (07:20 GMT)

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