Cocoa prices surge on New York rally<\/p>\n
KUALA LUMPUR (Reuter): Malaysian cocoa prices soared
\nyesterday, boosted by a surge in New York prices on Friday to
\neight-year highs, traders said.<\/p>\n
They said falling domestic production and steady demand for
\ncocoa beans were also helping prices.<\/p>\n
Cocoa prices in New York soared on Friday on concerns about
\nnext season's crop in the Ivory Coast and a developing El Nino
\nglobal weather pattern.<\/p>\n
Some growing areas in eastern Sabah state on Borneo island
\nhave been experiencing dry weather over the past three to four
\nweeks, but traders said it was too early to tell whether this was
\nbecause of the El Nino effect.<\/p>\n
"We have not seen rain in Tawau for at least three weeks now
\nand this is going to affect flowering and fruit-setting," said an
\nindustry official in Tawau, Sabah's main growing area.<\/p>\n
"But this could be a seasonal drought and nothing to do with
\nEl Nino," he said.<\/p>\n
An official with the U.S. National Oceanic and Atmospheric
\nAdministration (NOAA) said last week that warm ocean temperatures
\noff the western coast of South America had triggered an El Nino
\nweather pattern that could have a major impact on crop production
\naround the world.<\/p>\n
El Nino results in drier, warmer weather.<\/p>\n
The industry official in Tawau said it was too early to
\nforecast the crop size for the year "but production for October-
\nDecember certainly does not look promising."<\/p>\n
Output in Sabah, Malaysia's largest cocoa producing state
\naccounting for nearly 80 percent of the crop's national output,
\nhas already been affected by dry weather which is expected to
\nslash Malaysia's usual mid-year cocoa harvest by 60 percent.<\/p>\n
Growers were expecting a fall in production this year to below
\n100,000 tons against 122,000 tons in 1996.<\/p>\n
Falling output has been expected in Malaysia as farmers switch
\nto oil palm, a more profitable crop.<\/p>\n
Traders said domestic prices would continue to be influenced
\nlargely by developments in New York and London markets as the
\nsupply\/demand situation in Malaysia was very much predictable.<\/p>\n
Malaysia has been relying on imports of cocoa beans from
\nIndonesia as domestic production is not enough to meet demand
\nfrom the 11 active grinders in the country.<\/p>\n
On Monday, the Malaysian Cocoa Board quoted Standard Malaysian
\nCocoa (SMC) Grade 1A out of Tawau at an average of 3,870 ringgit
\na ton and Grade 1B, also out of Tawau, at an average of 3,745
\nringgit.<\/p>\n
Compared to Friday, the 1A was up 190 ringgit and 1B up 205
\nringgit.<\/p>\n
Malaysian traders said they expected cocoa prices in London to
\nopen five to 10 sterling higher on Monday.
\nOn Friday, September cocoa futures hit their highest level in a
\nyear. The contract closed 31 stg up at 1,127.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/cocoa-prices-surge-on-new-york-rally-1447893297",
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