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Poor African Crops Send European Cocoa Grind to 5-Year High

  • Bean grinding rose 4.9% in Europe in second quarter, ECA says
  • Poor West African crops mean local factories couldn’t process

European cocoa processing climbed to a five-year high in the second quarter as poor-quality beans in West Africa, the world’s largest producing region, spurred grinders to tap stockpiles elsewhere.

Grindings jumped 4.9 percent in the three months through June to the highest for that quarter since 2011, the Brussels-based European Cocoa Association said in a report on its website Tuesday. The increase was bigger than the 3.2 percent expected in a Bloomberg survey of 11 traders, brokers, analysts and fund managers published last week.

Cocoa processors are shifting grindings to Europe as the poor quality of crops in West Africa mean they haven’t been able to boost activity locally. Dry weather damaged the mid-crop, the smaller of two annual harvests in Ivory Coast and Ghana, forcing factories to tap stockpiles in Europe at a time traders including Cargill Inc. and Olam International Ltd. forecast shortages.

"It appears that the impact of El Nino on this season’s cocoa crop in...