January 19, 2015 / 1:10 PM / 5 years ago

Exclusive: Commodities trader Noble to exit cocoa business - sources

ABIDJAN/LONDON (Reuters) - Commodities trading house Noble Group is winding down its cocoa operations, three industry sources said on Monday, allowing its joint venture with China’s COFCO to focus on larger agricultural markets such as grains.

Two of the sources said the Hong Kong-based commodities trader is expected to have liquidated its cocoa trading book by June at the latest.

Noble declined to comment.

The two sources also said Noble had struck a deal to offload some of its cocoa pod counting and sustainability operations to cocoa trader and processor Transmar Group, and the U.S.-based company would also help wind down Noble’s trading book.

Transmar was not immediately available to comment.

The planned exit from cocoa is the first major change since Chinese state-grains trader COFCO paid $1.5 billion for a 51-percent stake in Noble’s loss-making agricultural division in April last year.

The joint venture links COFCO’s grain and oilseed processing and distribution business in China with Noble’s grain sourcing and trading arms, helping China meet its surging demand for animal feed ingredients such as soybeans and corn, as its expanding middle class consumes more meat.

The joint venture also included sugar, coffee and cotton as well as the cocoa operations.

“The bottom line is the Chinese didn’t want it,” one source said, referring to the cocoa business.

“They (staff) were instructed a few months ago not to do any business for next year, so the Ghana book will be run out, the Ivory book will be run out.”

Noble’s cocoa business included exporting operations in the world’s top two growers Ivory Coast and Ghana.

The move follows the departure of Paul Davis, a veteran cocoa trader, who resigned as global head of cocoa in October 2014.

Additional reporting by Manolo Serapio in Singapore; Editing by David Goodman, Louise Heavens and David Evans

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