Singapore, June 12 - Cocoa grindings in Asia's largest grinder, Malaysia, will be flat at 300,000 tonnes in the 2007/08 (Oct-Sept) crop year due to difficulties in getting beans, a senior industry official said on Thursday.
"It's clear they have problems getting cocoa beans from Asia. Indonesia is not big enough to satisfy the needs of Singapore and Malaysia in terms of grindings," said Laurent Pipitone, senior statistician at the International Cocoa Organization.
Malaysia, which processed 301,500 tonnes of beans in 2006/07, depends on imported beans mainly from Indonesia and Papua New Guinea because of a lack of domestic supply.
The ICCO has forecast Malaysia's output to rise slightly to 34,000 tonnes in the current crop year from 33,000 tonnes in 2006/07 due to ample rains.
"We are also expecting quite a slowdown in grindings compared with the previous year globally because of the rise in the price of cocoa beans, and the increase of the price of chocolate products," he told Reuters from London.
"We expect demand from consumers to slow down a little bit. That's why for Malaysia we are not sure if it will continue to grow as it did in previous year or it will stagnate," he said.
London September cocoa futures rose as high as 1,575 pounds a tonne on Thursday, its highest level since October 2002, on concerns overbean quality and output in top grower Ivory Coast.
But Indonesia, Asia's second-largest grinder, is estimated to process 140,000 tonnes of beans in the current year from 135,000 in 2006/07 tonnes after Jakarta scrapped a value-added tax on some commodities and also due to the availability of more fermented beans.
"The government tried to stimulate, push farmers ferment the beans," said Pipitone.
"One of the reasons why grinders had problems to increase their production was a lack of fermented beans, so they had to import from Papua New Guinea, Ivory Coast to get some of the beans and to mix them with local production."
Indonesia, the world's third-largest cocoa producer after Ivory Coast and Ghana, exports beans to grinders in Asia, Brazil and the United States.
Indonesia's output is forecast by the ICCO to rebound nearly 10 percent to 570,000 tonnes in the current crop year also because of ample rains.
In other parts of Asia, grindings in China are expected to rise to 42,000 tonnes in 2007/08 from 37,600 tonnes in 2006/07.
"One of the reasons is they consume more chocolates," said Pipitone, adding that grinders in China were also shifting to using beans to replace poor quality cocoa shells.
China is also one of Asia's largest grinders and is an emerging market for chocolate, with locals buying for occasions from Valentine's Day to Christmas. Chocolate is also replacing traditional sweets at weddings, said dealers.