A sharp slowdown in Ivory Coast cocoa arrivals supported price differentials in the European cash cocoa market this week, as fresh offers were scarce, traders said on Friday. "It looks as though this crop has come out quicker. That might explain why it's tailing off quickly," a European dealer said.
Some 35,000 tonnes of beans reached the Ivory Coast's two ports between January 1 and January 8, bringing cumulative arrivals for the season to around 711,000 tonnes, or 3.5 percent below the same period last year, exporters estimated. Ivory Coast registered 82,753 tonnes during the same week a year ago.
"It was a very short main crop," a second dealer said. Ivory Coast differentials were about 75 pounds over London nearby cocoa futures contracts LCCc1, compared to 70 pounds in mid-December. Ghana differentials were 110 pounds over London nearby cocoa futures, down from 125 pounds in mid-December.
Dealers said that the slowdown in bean arrivals in Ivory Coast helped prompt a rally in cocoa futures earlier this week, although gains were trimmed by losses made on Friday, following a lower than expected European grind figure. Cocoa futures fell on Friday after the Brussels-based European Cocoa Association said Europe's fourth-quarter 2011 cocoa grind rose 1.8 percent from the same period last year to 349,355 tonnes. "The figure of 1.8 percent was definitely below the expectation of the market, the big question now is whether more cocoa was ground in other places in the world," a European dealer said.
Dealers said the lower grind number reflected the difficulty people had selling semi-finished cocoa products, noting slow butter sales. However, price ratios for cocoa butter rose to 1.23 times London bean contracts, compared to 1.17 in December, recovering from three-year lows on increased demand.
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