Cocoa arrivals at ports in top grower Ivory Coast held up well over the past week and the weather was favourable, fuelling optimism for a strong end to the October-March main crop after a poor start to the season.
Supply problems in Ivory Coast, where administrators late last year slashed the crop forecast to about 1 million tonnes from 1.3 million, and fears about neighbouring Ghana, the neighbouring No. 2 grower, have driven up world prices.
Arrivals for the 2008/09 season reached around 710,000 tonnes by Feb. 1, exporters estimated on Monday, compared with 925,035 tonnes in the same period of the previous season.
Around 45,000 tonnes of beans were delivered to Ivory Coast's ports between Jan. 26 and Feb. 1, around the same level as the previous week and up from 26,199 tonnes in the same week a year ago, the exporters estimated.
Supported by a weak sterling, cocoa futures traded in London hit 24-year highs when they broke through 2,000 pounds a tonne last month. Benchmark U.S. March closed at a five-month high when trading closed on Jan. 29.
Arrivals at Ivory Coast's ports of Abidjan and San Pedro have been picking up in recent weeks, offering hope for a season that has been hit by poor weather, disease and chaos.
“We remain of the view that the tail of the main crop will be significantly better than was the case last season,” brokers Fortis said in a report on Friday.
“The next few weeks of Ivory Coast arrivals will be crucial not only in determining the actual size of the main crop but also the direction of the market,” the report said.
U.S. cocoa was trading was down $56 or 2 percent at $2,715 Monday morning while London May was down 36 pounds to 1,943 pounds per tonne at 1308 GMT.
“I'm not sure whether we will maintain this level of arrivals for a long time but we have to be happy that we are receiving these volumes at the moment,” the manager of a European cocoa exporting company said in Abidjan.
Fears that a poor October-March main crop could be followed by a disappointing mid crop, due to harsh winds damaging young cocoa pods, were eased by farmers reporting that the dry, dusty winds had not ravaged Ivory Coast's main growing areas.
Farmers around Gagnoa, Divo and Abengourou were also pleased with sporadic rain mixed with hot weather over the last week that should boost the mid crop, which starts in April.
But hot, dry weather was reported from most of the western cocoa belt, while many in Ivory Coast feel the gap will be too much to overcome after such a difficult start to the season.
Another exporter said that volumes of cocoa coming out of the bush would drop rapidly by the middle of the month.
“In theory, we are expecting the (weekly) volumes to go from round 40-45,000 tonnes to below 30,000 tonnes after Feb. 15 because we are at the very end of the main crop,” said an Abidjan-based sales director of an international exporter.