Cocoa butter prices have dropped in Asia, with only a few chocolate makers showing interest in nearby cargoes despite the summer holiday season, dealers said on Friday.
Ratios for butter, a key ingredient for chocolate, dipped to 2.60 times London futures from 2.63 two weeks ago in Malaysia and Indonesia. Butter prices are determined by multiplying ratios with related London contracts. "A lot of people are already covered, although I guess there are still inquiries for nearby and those who are tight won't mind paying butter at this ratio," said a grinder in Singapore.
"In general, the ratio is already on the high side because there has been shortage in butter for nearby shipments," he said. Butter ratios have risen around 12 percent since early this year, driven by a shortage in good-quality beans from Indonesia as well as purchases by chocolate makers ahead of the Easter celebration and summer holidays.
Grinders in Singapore, Malaysia and China depend on beans from Indonesia, where a combination of dry and wet weather has damaged cocoa trees on the main growing island of Slaws. The main harvest normally runs from April to July, but erratic weather in the world's third-largest cocoa producer had delayed the harvest in Slaws to May and shortened the season.
Daily arrivals of cocoa beans to Makassar, the provincial capital of South Slaws and a key port for cocoa exports, dropped to 300 tonnes this week from 500 tonnes two weeks ago as the crop came to an end. The next harvest, a smaller mid-crop, is due in October and dealers said erratic weather may also affect output.
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