Cocoa exports from Indonesia's Sulawesi island tripled from January to April to 36,745 tonnes, but dry weather has delayed Malaysia's harvest and raised fears of tighter supply.
At least two shipments, totalling up to 26,000 tonnes are also scheduled to leave for the United States at the end of June from the key port of Makassar in Indonesia's South Sulawesi province, traders said on Thursday.
Exports from the cocoa hub of Sulawesi in April alone nearly doubled year-on-year to 7,574 tonnes. The main-harvest in Indonesia's Sulawesi is underway and expected to peak this month, before tapering off in August.
Sulawesi Island produces around 75 percent of Indonesia's total cocoa output. "Looking at the data, production (this year) will definitely be better than last year. We're expecting higher volumes in May and June during the peak season," said one official from the Indonesian Cocoa Association.
Indonesia, the world's third-largest grower after Ivory Coast and Ghana, is projected to produce 420,000 tonnes of beans for the calendar year 2004, compared with some 386,000 tonnes in 2003, thanks to favourable weather and better crop maintenance. Last year's output was badly hit by a dry spell. Indonesian traders said cocoa bean arrivals from surrounding plantations on Sulawesi had fallen to 1,000 tonnes this week due to rain and transport problems, against 1,500 tonnes a week.
"Arrivals are slowing down, although we expect they will be well spread out till August," one Makassar trader said.
Sulawesi bean prices ex-farmers and middlemen were offered three percent higher at between 11,000 to 11,100 rupiah ($1.17 to $1.18) a kg on Thursday, mainly driven by higher global prices.
Speculative buying in New York cocoa futures supported prices throughout the day on Wednesday, when most-active September cocoa settled up $19 at $1,370 a tonne.
Traders said differentials for Sulawesi beans under September contract had widened to between $180 to $190 a tonne due to ample supplies, and buyers were not rushing in at this stage.
However in Malaysia, dry weather has delayed the harvest in several areas in the growing state of Sabbath on Borneo Island, raising fears of more output declines there.
Malaysia has seen cocoa output fall in recent years because more and more farmers have shifted to growing palm oil for a quicker return. Malaysia's cocoa production peaked in 1990, when it produced nearly 250,000 tonnes. "The harvests are underway in some places but in other areas, flowering has just begun. Rains only started to fall last month," said one trader in the growing district of Taw. Falling output has forced Malaysian cocoa grinders to turn to Indonesia, Papua New Guinea and even Africa to source beans.
Malaysia, one of the world's top cocoa grinders, was seen grinding up to 200,000 tonnes of beans in 2004, up from last year's 167,000 tonnes, according to the state-run Malaysian Cocoa Board (MCB).
It supplies major Western confectioners such as Nestle, Mars Inc, Cadbury and Hershey, but also counts the Middle East as one of its fastest-growing markets. Some traders said around 1,000 tonnes of beans were kept at warehouses in Taw but they mainly came from old stocks.
Another harvest in Sabbath was expected to start in September. The MCB has estimated output at 36,000 to 40,000 tonnes in 2004 compared with 36,236 last year, but some traders said this year's production was expected to be less than 30,000 tonnes.
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