Cocoa butter ratios ticked higher in Asia this week as chocolate makers returned to the physical market after the Lunar New Year holidays, while expectations of rising demand ahead of Easter offered additional support. Cocoa butter, a key chocolate ingredient, was offered at ratios of 1.05 to 1.15 times London futures, up from 1.0 to 1.05 in early January. Ratios plunged to an all-time low of 0.92 in December on ample supply.
"There is probably an expectation that the lows are in place now and that we should probably see higher markets," said a dealer in Singapore, referring to a rebound in ratios. "The butter was cheap (but) it is still powder that is driving the market." 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 edged down to between $4,500 and $4,600 a tonne, but the decline was mainly due to strengthening butter ratios.
Chocolate sales normally surge 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. In recent years powder demand has outpaced butter because most cocoa products consumed in emerging markets are powder-based, including chocolate-flavoured cakes and ice cream.