Singapore, Oct 19 - Malaysia's cocoa grindings fell 15.2 percent to 72,014 tonnes in the third quarter from a year ago, but demand was expected to improve in the last quarter, the Malaysian Cocoa Board said on Monday.
Malaysia, Asia's largest cocoa grinder, has seen demand for butter and powder fall this year as chocolate makers cut purchases during the global economic downturn, which also forced factories to reduce capacity.
"However, local grindings showed a moderate recovery as grindings from July to September 2009 registered a positive growth of 12.3 percent, compared to the second quarter of 2009 as most grinders anticipate an improvement in the demand of cocoa butter in the fourth quarter," it said in a statement.
The MCB gave no further details but the Cocoa Manufacturers Group, whose members include grinders, said declines in grindings in the last four quarters had reduced butter stocks in Asia.
"On the other hand, there's a strong demand for cocoa powder, leading to higher prices," it said.
When processing beans, grinders get butter and cake, which is later pressed into powder. Butter is also used to make spreads and soaps, while powder is used for coatings in chocolate-making, beverages and ice cream.