Europe cash cocoa:High prices weigh on demand
AMSTERDAM Jan 18 (Reuters) - Price differentials on Europe's cash cocoa market were unchanged this week as high prices weighed on demand keeping market players on the sidelines, traders said.
"It seems that Ivory Coast crop quality will be extremely good this year," one trader said. "With such good prospects people expect prices to go down."
Traders cited North American cocoa grindings data which showed 2012 fourth quarter grinding was up 0.95 percent year-on-year, representing the first rise since 2011.
In Europe, the fourth-quarter cocoa grind fell 6.2 percent from the same period a year earlier to 327,982 tonnes, the Brussels-based European Cocoa Association said on Tuesday.
Differentials for good quality Ivory Coast beans for nearby delivery were slightly weaker at around 50 pounds ($79.84)over the London March 2013 cocoa contract, the same as last week.
"The production outlook for West Africa is not as bearish as front month prices reflect and we assume prices will retrace higher in the first half of 2013," Rabobank said in its monthly report.
May cocoa futures on Liffe were unchanged at 1,481 pounds ($2,400) a tonne on Friday afternoon after touching 1,490 pounds, the highest level for the second months.
Price ratios for cocoa butter, the key chocolate ingredient, were unchanged, traders said. Butter ratios for January-March delivery on Friday were 2.11 times nearby London cocoa bean contracts <0#LCC:>. ($1 = 0.6262 British pounds) ($1 = 0.6262 British pounds) (Reporting by Ivana Sekularac; editing by Keiron Henderson)