DB cuts Barry Callebaut as still high cocoa prices hinder demand recovery, shares fall

** Shares in Barry Callebaut BARN fall nearly 5% after Deutsche Bank cut its rating on the Swiss chocolate maker to "hold" from "buy", flagging that slow demand may cap share price improvement

** Up to Wednesday's close, shares recovered 35% from a sell-off in July, triggered by its third volume guidance cut this year

** The broker flags that despite recent cocoa price declines cocoa is still expensive in the long run, possibly still leading to substitution or a slower level of incremental cocoa usage

** "With the stock already at a small premium to Staples, we expect that cocoa will have to fall considerably more in order for underlying demand to suggest a re-rating back to historical premium highs," it says

** Much of the upgrade potential from customer restocking as well as underlying consumer demand improvement is now reflected in the share price, it adds