North American cocoa grind takes biggest plunge in six-and-a-half years

North American cocoa grindings made their biggest quarterly plunge in 6-1/2 years and fell from the prior record crop year, data from the National Confectioners Association showed on Thursday, after weak margins discouraged processing.

Cocoa processors in the United States, Mexico and Canada reported grinding 124,229 tonnes of beans in the third quarter, ended September, down 10.01 percent from the same period in 2014, which was a record high.

The region's bean grinding had been expected to fall 2-10 percent, with many forecasts at the low end of this range.

The drop came as ADM Cocoa stopped reporting cocoa grinding for the first time after Olam International Ltd said it would buy ADM's cocoa business for US$1.3 billion.

For the 2014/15 crop year, which also ended in September, the region's grind totaled 488,982 tonnes, down 6.7 percent from the prior year's record, Reuters calculations showed.

The International Cocoa Organization (ICCO) has forecast global grindings to have fallen by 4 percent to 4.1 million tonnes in 2014/15.

It was the fourth straight weak quarter following two years of quarterly increases, after consumers responded negatively to higher chocolate prices and as weak processing margins deterred grinders from building up inventories.

In contrast, on Wednesday, data showed Europe's third-quarter cocoa grind rose 2 percent to 334,362 tonnes.

Countries where cocoa is grown have been increasing their grinding capacity and the ICCO has estimated that Ivory Coast's bean processing rose by 41,000 tonnes to 560,000 tonnes in 2014/15, making up 14 percent of the world's total.

Though the report showed that both ADM Cocoa and World's Finest Chocolate Inc, which reported a year ago, did not report grindings in this past quarter, it states the aggregate number of plants unchanged at 17. A call to the National Confectioners Association was not immediately returned.

The 9 companies that took part in the North American survey are: Barry Callebaut, Blommer Chocolate Co, Cargill Cocoa & Chocolate Co, ECOM, Ghirardelli Chocolate Co, Guittard Chocolate Co, Hershey Co, Mars Chocolate North America, Nestle Chocolate & Confections.