Cocoa butter ratios were little changed in Asia this week as industry players returned from the New Year holidays, but re-stocking is likely to support prices in coming months, dealers said on Friday. Cocoa butter, a key chocolate ingredient, was offered at ratios of 1.0 to 1.05 times London futures, similar to last week. Ratios plunged to an all-time low of 0.92 in December because of ample supply and a slump in demand.
"This week is the start of the year so a bit quiet and not much activity," said a Singapore-based cocoa trader. "In general, cocoa butter is a little bit firmer and some stock buying is coming in." "Powder has softened a little bit," he added. "2012 demand will come from replenishing of stocks and inventories, because many are very low everybody is calling for nearby delivery."
Worries about global economic uncertainty and the debt crisis in Europe have weighed on soft commodities, with cocoa particularly hit by rising supplies from key producers in West Africa. Asian shares fell and the euro hovered near a 16-month low against the dollar on Friday on worries that the euro zone debt crisis is crippling European banks, with players hoping US job data later in the day will help improve sentiment.
Chocolate sales usually rise in the main consuming regions of Europe and North America during several holidays, including Christmas, Valentine's Day in February and Easter in the spring. London March cocoa fell 13 pounds, or 1 percent, to finish at 1,332 pounds per tonne on Thursday. In December, the contract tumbled to its weakest point since October 2008.
When processing beans, grinders get butter and cake, which is later pressed into powder and used for coating in chocolate making, beverages and ice cream. Butter is also used to make spreads and soaps. Powder prices were a little lower at between $4,500 and $4,700 a tonne.