Cocoa demand seen lower in Asia extending global slide

Cocoa processing in Asia probably fell 12 percent in the first quarter after a surge in prices of butter extracted from the beans hurt demand from confectioners and chocolate makers.

Grinding declined to 139,750 metric tons from 159,617 tons a year earlier, according to the median of four analyst and trader estimates compiled by Bloomberg. The report from the Cocoa Association of Asia, comprising data from Indonesia, Singapore and Malaysia, is scheduled for release on Friday.

Cocoa futures climbed 7.4 percent last year extending a 21 percent jump in 2013, pushing butter to a six-year high in August. Cocoa processing generates butter, which accounts for as much as 20 percent of a chocolate bar's weight, and powder, used in ice cream, soft drinks and cookies. Higher ingredient costs prompted Hershey Co and Mondelez International Inc to raise prices of their products, hurting demand.