Active Buying Hardens Se Asian Cocoa

Southeast Asian cocoa prices are holding firm on active buying spilling over from last week and industry sources said on Wednesday demand for beans was expected to stay bullish in the near-term. Most current purchases are being made by international exporters to cover sales made previously to consumers, and few are being taken up directly by end-users, they said.

There seems to be plenty of beans in the market at the moment and everyones covering positions, said the commercial manager of a major confectionery firm in Malaysia.

I dont see any changes in the fundamental features of the market in the near-term, he added.

A trader with a cocoa broking house in Singapore estimated that Malaysian-based exporters had bought around 3,000 tonnes of beans when prices rallied in New York last week.

The end-users are really not making any fresh purchases, as its quite difficult for them to predict what the market will be like, he said. Another confectionery manager said he also saw prices keeping steady next week unless we have Phibro or someone else coming out with comments.

Phibro is one of the biggest operators in the cocoa market. A Phibro director, Alan Ward, fuelled a rally in international prices last week when he said London prices could hit 1,500 sterling a tonne. May cocoa closed in London on Tuesday at 1,033 sterling. On Wednesday, traders quoted Standard Malaysian Cocoa (SMC) Grade 1 A out of Tawau, the countrys main growing area, at an average of 3,232 ringgit a tonne, ex-warehouse, from 3,250 ringgit the week before.

The SMC 1B grade was quoted at an average of 3,315 to 3,325 ringgit from 3,312 to 3,322 ringgit previously. Indonesian cocoa prices withstood a technical correction in New York overnight, while buyers actively sought beans to fill contracts, traders said.(Reuter)