Asian processing plants increased grinding capacity of cocoa by 3.7 percent during the first quarter of the year, spurred higher by stronger demand in the region, according to Bloomberg.
Thus far this year, cocoa futures have risen about 10 percent, which builds on the 21 percent climb that the soft commodity achieved in 2013. But Goldman Sachs forecasts cocoa futures to be negatively impacted by this year's manifestation of El Nino, a weather system that impacts agriculture.
"Rising incomes are fueling bigger consumption of cocoa-based products in the region," director of agricultural commodities research Abah Ofon at Standard Chartered Plc. in Singapore told the news source. "It's just going with the trend of rising consumption of what you would normally classify as non-staples. In the same vein, you'd probably see an increase in coffee consumption."
At 8:55 a.m. on Wednesday, cocoa futures edged up 0.17 percent, a $5 lift to $2,986 per metric ton.
Reuters reports global agribusiness Archer Daniels Midland CO. said earlier this week that it plans to continue pressing the soft commodity but will unload its chocolate business.
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