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.