Last-minute purchases by chocolate makers ahead of the Easter holiday kept butter prices steady in Asia, but any resumption of bean export from Ivory Coast could put pressure on the physical market, dealers said on Thursday. Cocoa butter, a key ingredient for making chocolates, were offered at a ratio of 1.30 times London futures, steady from last week. NYSE Liffe July cocoa reversed to end down 7 pounds at 1,922 pounds a tonne on Wednesday.
"There's still demand for butter, although I would say it's not much. Whenever there is a dip in the market, consumers will buy," said a dealer in Singapore. When processing beans, grinders get butter and cake, which are later pressed into powder. Butter is also used to make spreads and soaps, while powder is used for coatings in chocolate-making, beverages and ice cream. Prices of powder were steady at $5,000 a tonne in Malaysia and Indonesia, which helped butter ratios stay at current level despite easing worries about a possible disruption in grindings in Ivory Coast, the world's largest cocoa producer.
Ivory Coast is beginning to recover from a violent post-election power struggle that ended last week with the arrest of former President Laurent Gbagbo. The first shipments of cocoa are expected within days although normal volumes are not expected before the end of April.
Dealers expected demand for powder to offer support for butter market, which had seen a pick up in buying interest in the first quarter of this year. Chocolate flies off the shelves in the main consuming regions of Europe and North America during Christmas at the end of the year, Valentine's Day in February, Easter in the spring, and other holidays. Cocoa grindings in Malaysia, Asia's largest grinder, rose 10.8 percent in the first three months of 2011 from a year before, the Malaysian Cocoa Board said, similar to gains in North America and Germany. Fears that unrest in Ivory Coast could disrupt the supply of beans gave a boost to grinders in Asia, Europe and North America earlier this year, with chocolate makers also stocking up ahead of the Easter holiday.