Cocoa beans are scarce in Indonesia's key growing area of Sulawesi ahead of this year's main harvest, which is expected to be delayed until the end of April, traders said on Friday. Tight supply and the recent strength in New York futures should support local cocoa prices at the 14,000 rupiah ($1.50) per kg level in coming weeks, they said. "The fundamental picture has not changed much over the last couple of weeks.
We don't see much by way of arrivals until maybe the second or third week of April," one Makassar trader said. The main crop is usually harvested from April to July. Sulawesi beans collected from farmers and middlemen were offered at 14,200 rupiah ($1.51) a kg on Friday, following gains in New York.
That compares with prices closer to $1.3 per kg in the year. Speculative buying helped push benchmark May in New York to a contract peak of $1,850 a tonne on Thursday before it settled just $1 on the day at $1,830.
Sulawesi Island accounts for 75 percent of Indonesia's output. The Southeast Asian country is the world's third-largest producer after Ivory Coast and Ghana. Differentials for Sulawesi beans under May cocoa futures were quoted at between $220 and $230 per tonne, free-on-board basis, due to poor quality.
Traders do not expect differentials to narrow significantly and expect fresh beans to enter the market next month at between $230 to $240 a tonne under. Traders expect Indonesia's main-crop output, which accounts for 70 percent of total output, to be similar to last year's at around 200,000 tonnes.