London cocoa futures made modest gains by the end of trade on Tuesday, despite speculative selling and a strong pound discouraging buyers, dealers said.
The market remained undecided about its next price direction and dealers said the bias could be on the downside in the short term.
Benchmark May closed three pounds higher at 849 pounds a tonne on 3,571 lots.
It moved in an 856-837 pound range during a see-saw session of thin volumes. Front month March also gained three pounds at 875 on 2,099 lots, out of a total turnover of 8,347.
"I have been bearish now for a long time and if the 836 level (basis May) doesn't hold I think we can break below 800... in the 775 area," a dealer said.
Prices found little support from industry and hovered above recent lows at 836 hit last Friday and previously seen in early November 2001.
Industry players in Ivory Coast said the end of the main crop tail looked healthy and recent arrival figures had narrowed the gap with the previous bumper harvest.
Most of what was left of this gap would be cocoa smuggled into Ghana.
Traders said Ghana should have already purchased around 500,000 tonnes since the start of the season, versus a total 2002/03 crop of around 470,000 tonnes.
"We have to see how the end of the crop comes and how the weather affects the mid crop. But this one looks ok for now," the dealer added.
"The only factor left is the specs, who are short in New York and a little bit short in London. They have a lot of room to add shorts, so I think we can go lower in the short term."
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