Cocoa futures ended higher Thursday ahead of key demand data out of North America for the main ingredient in chocolate.
Continue Reading Below
Cocoa for December closed up 3.8% at $2,145 a ton on the ICE Futures U.S. exchange.
After the close, the National Confectioners Association released data that showed that lower prices for cocoa beans had led to a marginally higher boost in North American demand for the main ingredient in chocolate.
North American cocoa processors reported a 0.7% increase in beans processed during the third quarter of 2017 from a year earlier. The 125,263 tons of cocoa beans processed by North American factories in the third quarter was an increase over last quarter when 123,125 tons of beans were processed and is the highest quarterly figure for the region since the third quarter of 2013.
The report, referred to as the grindings report by traders, is used as a proxy for demand for cocoa in North America, the second largest consumer of cocoa in the world.
European processing volumes of raw cocoa beans rose 3% in the third quarter year-over-year, slightly outperforming industry expectations, according to data released last week by the European Cocoa Association.
Continue Reading Below
Cocoa grindings--the amount of raw cocoa processed into butter and powder for the manufacturing of confectionary and chocolate--ticked up to 353,544 metric tons of beans in the July-September period--a mild improvement on 2017's second quarter, the Brussels-based ECA said.
J. Ganes Consulting LLC said in a note that for 2017-18 the markets can expect a drawdown in cocoa stocks due to strong demand following a dive in prices for much of this year. But she said not to expect an immediate reduction in production coming out of Ivory Coast and Ghana
"The governments of the Ivory Coast and Ghana have been trying to enter into a formal agreement in attempt to manage supply to help to shore up prices. Normally these type pacts are ineffective and generally more disruptive than helpful," the firm said.
In other markets, raw sugar for March was up 0.4% to settle at 14.13 cents a pound, arabica coffee for December rose 2.1% to end at $1.2685 a pound, frozen concentrated orange juice for December was up 1.2% to end $1.521 a pound and December cotton was off 0.5% to close at 67.31 cents a pound.
Write to Julie Wernau at email@example.com
(END) Dow Jones Newswires
October 19, 2017 18:08 ET (22:08 GMT)