Figures released Thursday showed that so-called grinds — where cocoa is turned into butter and powder used in confectionery – only fell about 2% in Europe and edged lower in Asia during the first quarter from a year earlier. Prices more than doubled in the period as bad West African harvests curbed supplies.

The market is keeping an eye on processing data to get an idea of whether the unprecedented rally is starting to hurt demand and how hard it’s becoming for chocolatiers to get hold of beans. Traders and analysts expected first-quarter grindings to drop — though the data risks becoming a less reliable guage of demand as shortfalls make it more difficult to source cocoa.

Futures rose as much as 5.2% in New York, nearing Monday’s all-time high.

The grindings figures are “an indication that for now demand is holding up despite current pricing,” said Paul Joules, an analyst at Rabobank in London. “I think demand destruction will come, but clearly it’s taking longer to filter into grind data than the market was anticipating.”

Data for first-quarter grindings in North America are due later Thursday. Better-than-expected figures could be “very bullish” for futures, Joules said.

Cocoa Crisis

The global cocoa shortage and price spike is raising chocolate costs and stressing buyers and traders, who are scrambling to secure beans but wary of being burned by the volatile market. Some processors have been forced to halt production intermittently or pay premiums to book beans from minor growers to secure supplies.

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Cocoa climbed 4.9% to $10,558 a ton in New York. London cocoa futures jumped as much as 11%, before paring some of the gain. 

Cocoa supplies could face further pressure from floods in Nigeria, the fifth-largest grower, as planting and mid-crop harvest disruptions are expected.

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