SE Asian cocoa prices mixed after NY rally

SE Asian cocoa prices mixed after NY rally

KUALA LUMPUR (Reuter): Southeast Asian cocoa prices were mixed this week, with rates in Malaysia softened by technical factors, while Indonesian prices showed a rise in tandem with the rally on New York CSCE cocoa futures, traders said yesterday.

"The demand and supply situation is just about balanced in Malaysia now and that's probably why market prices are a bit soft," said a Malaysian cocoa trader on Thursday.

The Malaysian Cocoa Board quoted the SMC 1A grade cocoa beans out of Tawau, the country's main growing area on the eastern Sabah state, at an average of 3,600 ringgit a ton yesterday. Grade 1B, also out of Tawau, was quoted by the board at an average of 3,550 ringgit.

Compared with last week, both grades were down by $250. But if compared to Wednesday, the IA was unchanged while the IB was up by 25 ringgit.

"The prices see a technical adjustment every now and then," said another trader. "Both grinders and importers are saying they gave enough beans for the moment."

Traders said the Malaysian market was currently mixed with local and Indonesian beans, as well as those imported from Papua New Guinea, Ghana and Solomon Islands.

Indonesian traders said on Thursday cocoa prices rose after rises on New York and that supply remained tight.

"In general, supply is quite tight. Prices are going up basically because of the rally in New York," said one trader in the key growing area of South Sulawesi.

"Some traders say the decline in supply is due to the uneven pod development, either because of the weather or because of improper fertilizing," he said.

The trader said some suppliers had started to take positions in the wake of higher prices. "But the price rally has also created a problem, with farmers collecting cocoa beans even though they are not fully ripe yet," he said.

He said he believed there was no problem with weather, adding that the current rain pattern had been beneficial for the mid- crop.

Another trader said arrivals in Ujung Pandang, capital of South Sulawesi, had been steady.

"I tend to say that the overall production in Sulawesi is going down, but this is not felt because of the harvest of the new plants," he said.

He said most traders believe the mid-crop harvest would be sooner than usual in October because of the change in the production pattern.

"I think the mid crop will be good because of sufficient rain. In addition, enough sunshine will also help the process of drying up for the beans," he said.

He said demand was still strong, either for spot or futures contracts.

Traders said fair, average quality cocoa was quoted at 3,400- 3,450 rupiah/kg in Ujung Pandang, compared with 3,300-3,350 rupiah/kg last week. Prices in North Sumatran city Medan was generally stable at 3,675 rupiah/kg.