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.