Europe cash cocoa: Market down on Ghana sale
AMSTERDAM, July 15 (Reuters) – Price differentials in Europe’s cash cocoa market eased this week as the world’s second-largest producer Ghana stepped up sales, traders said.
Ghana differentials were at about 115 pounds ($185.8) over London nearby cocoa futures contracts LCCc1, from 135 pounds last week. Ivory Coast differentials were 40 pounds over London nearby futures contracts LCCc1 compared with 60 last week.
“Ghana still has plenty of cocoa, and they are pushing it a bit. They mostly sold the old crop, but they managed to sell some new crop as well,” a trader said.
Ghana private cocoa buyers declared 39,394 tonnes of cocoa purchases to industry regulator Cocobod between the start of the season and July 7, up from 10,024 tonnes for the same period a year ago, data showed earlier this week.
European cocoa stocks have been slowly drawn down this year as exports from top producer Ivory Coast were halted for more than three months because of political conflict, forcing cocoa consumers to rely on other sources and existing stocks outside of the country.
Valid cocoa stocks in NYSE Liffe’s nominated warehouses as of July 11 fell to 101,770 tonnes from 109,080 on June 27, exchange data showed.
But traders said the demand in Europe is low on expectations the next season will be the same or even better than this.
“We are between two seasons and the market is still expecting to hear news on the new crop before making any decision,” another trader said.
Cocoa farmgate prices in Ivory Coast’s key growing regions mainly fell last week, as beans were mouldy and small in size.
Price ratios for cocoa butter, a key ingredient in chocolate, were about 1.27 times London bean contracts <0#LCC:>, the same as last week.
“There is very little demand. People bought what they wanted to buy a couple of months ago when ratios were lower,” one trader said.
Europe’s second-quarter cocoa grind rose 8.3 percent on the same period a year earlier to 355,593 tonnes, the Brussels-based European Cocoa Association said on Thursday.
The rise was higher than analysts and dealers had expected.
They had said before the data was released that the grind could increase due to capacity moving to Europe from Ivory Coast, where factories stopped processing beans temporarily during the first half of the year.
(Reporting by Ivana Sekularac; editing by Sara Webb and Alison Birrane)