Price differentials in Europe's cash cocoa market rose this week on increased demand spurred by speculative buying, but gains were limited by abundant supplies, traders said. Ivory Coast differentials were about 75 pounds ($120.443)over London nearby cocoa futures contracts, compared with 65 pounds last week. Ghana differentials were 130 pounds over London nearby cocoa futures, compared with 110 pounds last week.
"We have seen some extensive fund buying last week and that lifted price differentials up," one trader said. "On the other hand the industry waited for hedging opportunities and the market absorbed (increased) demand." The authorities in Ivory Coast, the world's largest cocoa grower, are expecting to set a new record of 1.6 million tonnes of cocoa output for the 2011/12 season, a senior government cocoa adviser said on Wednesday.
The country's main cocoa-growing regions enjoyed good rains mixed with sunny spells last week, boosting the development of the main cocoa crop, but there were signs of black pod disease in some areas, farmers said on Monday. Ivorian arrivals are currently around half of last season's levels, because farmers have been holding back their beans in anticipation of a rise in prices. Price ratios for cocoa butter, a key ingredient in chocolate, were unchanged with nearby contracts 1.0 times London bean contracts, the same as last week.
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