SE Asian cocoa prices mixed over El-Nino concern
SE Asian cocoa prices mixed over El-Nino concern
KUALA LUMPUR (Reuter): Malaysian and Indonesian cocoa prices
were mixed this week and concern was growing in both countries
about the recent weather extremes thought to be the effect of the
El-Nino phenomenon, traders said.
"There are signs and symptoms of the El-Nino effect here," a
veteran cocoa dealer in Sabah, Malaysia's largest cocoa-producing
state on Borneo island, told Reuters yesterday.
After a record rainfall in July, Sabah has been
extraordinarily dry. "Not a single drop of rain has been seen,"
he said by telephone from Kota Kinabalu, Sabah's capital.
"This is quite indicative of the El-Nino, which is extreme in
all conditions," he said. The dealer said the last time Sabah
experienced such a phenomenon was in 1982.
El Nino is a weather effect caused by interaction between warm
sea surface temperatures off South America and the atmosphere,
which scientists say causes drought in eastern Australia,
Indonesia, Papua New Guinea and nearby areas.
Experts said the cocoa crop was most vulnerable to El-Nino in
this region, while crops such as rubber and palm oil were largely
unaffected.
On Wednesday, the Malaysian Cocoa Board (MCB) quoted the SMC
1A grade out of Tawau at 4,375 ringgit ($1498) a ton, up 73
ringgit from Tuesday, but down 125 ringgit from a week ago.
The board quoted the SMC 1B grade from Tawau at 4,317 ringgit
a ton, up 79 ringgit from Tuesday, but down 96 ringgit from last
week.
Indonesian cocoa prices were steady on Wednesday, with traders
saying the mid-crop harvest could be smaller despite forecast of
rains in November over the key growing region of South Sulawesi.
The Indonesian meteorological department said on Tuesday the
wet season was expected to begin in some parts in September, but
rainfall in South Sulawesi was only expected in November.
A drought sweeping the archipelago and linked to the El Nino
weather pattern forming in the South Pacific had jeopardized
export crops such as cocoa and coffee.