Price differentials in the European cash cocoa market were little changed this week as the market was focused on mid-crop quality and weather conditions in Western Africa's major growing regions. Volumes were light with buyers reluctant to step in due to high prices, traders said.
"It is never too late to pay high prices," one trader said. "Instead, buyers decided to wait for prices to come down." Ivory Coast differentials were about 75 pounds ($120) over London nearby cocoa futures contracts, up from 70 pounds last week. Ghana differentials were 100 pounds over London nearby cocoa futures, up from 95 pounds last week.
Cocoa futures on ICE were lower as the market slipped back slightly from Thursday's strong advance. May cocoa on ICE was off $21 or 0.9 percent at $2,374 a tonne. "The market is volatile due to the absence of counterparts," another trader said. He said that the market is hoping for any news that could indicate the quality of mid-crop.
"The weather seems to be beneficial, and I don't think there will be a big deficit in the market," he said. A spell of good rainfall mixed with sunshine last week in most of Ivory Coast's cocoa regions may provide adequate growing conditions for its April-September mid-crop harvest, farmers and analysts said on Monday.
Valid cocoa stocks in NYSE Liffe's nominated warehouses rose to 75,230 tonnes as of Mar. 5 from 66,030 tonnes on February 20, exchange data showed on Thursday. Price ratios for cocoa butter, a key ingredient in chocolate, were unchanged from last week on weak demand. "There is a crisis feeling and buyers are holding their horses," one dealer said. "We expect demand to pick up ahead of Easter, but that is not going to be significant."
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