Prices of cocoa powder were under pressure in Southeast Asia because of ample supply in main producers Malaysia and Indonesia and limited interest from chocolate manufacturers, traders said on Thursday.
"I used to offer powder at $2,200 a tonne but I was not able to find buyers for so long. I have cut down prices to at least $2,050," said one grinder in Malaysia, which is Asia's largest grinder.
Cocoa powder, mostly used for coating in chocolate manufacturing and in beverages and ice cream, was also offered at between $1,700 and $1,900 a tonne in Malaysia for lower-quality variety.
In neighbouring Indonesia, powder prices were flat at between $1,500 and $1,600 a tonne as local grinders struggled to sell the product.
Dealers said chocolate manufacturers were generally well covered ahead of the Easter holiday in April, which meant that demand for butter, a key ingredient for chocolate, would also be limited.
Dealers said the butter ratio was quoted at 1.90 times London futures for February and March on an FOB basis, versus 1.95 times two weeks ago.
April/May ratio eased to 1.85 times from 1.90 previously. "I would like to quote butter at 2.0 times because powder prices are poor.
People are selling powder like selling corn so cheap," said the Malaysian grinder. Grinders would normally push up the butter ratio to compensate for falling powder prices.
When cocoa beans are processed, grinders get butter and cake, which is later pressed into powder.
London cocoa futures fell on Wednesday in thin business and dealers said the market continued to consolidate within recent territory.
Front-month March slipped seven pounds to 881 pounds on 1,244 lots.
The processing of cocoa beans results in several products that are priced as ratios to the bean prices.
The ratios indicate good demand for the product and the beans.
Chocolate consumption normally picks up during Christmas and New Year celebrations, Valentine's Day and Easter. Halloween festivities also mean more chocolate consumption.
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