High London cocoa futures again restrained European physical cocoa trade this week, with only limited industry buying on price dips reported, traders said on Friday. European physical cocoa butter ratios remained high, with the apparent poor quality of Indonesia's new crop reducing sales offers in Europe by Asian producers.
"The London market did not really please anyone this week," one trader said. "It was not high enough to generate aggressive bean selling by origin suppliers. "Industry did do some buying on the days London dipped but this appeared to be relatively limited short covering, largely for nearby delivery.
"The London market was way too high to stimulate new industrial strategic purchasing this week." Traders noted European industry buying when London moved towards 1,000 pounds a tonne.
On Friday, London's September contract was at 1,060 pounds. It has been well over 1,000 since May. "With quality problems in both Ivory Coast and Indonesia, business remains difficult," a trader said. "Buyers and sellers were far apart in their price ideas." Indonesia's cocoa crop has been hit by bad weather this year and is now arriving after a delay of several weeks. "The bean sales offers I received from Indonesia this week were just too poor quality to realistically sell in large volumes to industry," a trader said.
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