Jakarta, July 3 - Indonesia's Sulawesi cocoa beans were offered for sale at a bigger discount than a month ago in an attempt to attract buyers at a time when soaring cocoa futures have pushed local prices at a historic high, dealers said on Thursday.
Sellers offered Sulawesi fair-average cocoa beans for export at a discount of $225 a tonne under the New York September cocoa contract, against a discount of $200 a month ago, said a dealer in a foreign trading firm in Makassar, the capital of South Sulawesi province and the country's key port for cocoa export.
"The discount is widening because cocoa futures keep going up," the dealer said.
"There is much lower demand for beans. At this price level, people who are making chocolate or who use cocoa products are not able to do business," the dealer said.
Cocoa is the latest in a long list of food and agricultural products to have seen a dramatic price increase this year, adding to costs for the world's chocolate companies.
The benchmark September cocoa contract finished down $27 at $3,248 a tonne on Wednesday, in a mild correction of Tuesday's rally to another 28-year high. The level was also higher than last week's close of $3,122 a tonne.
Sulawesi's fair-average cocoa beans hovered at 27,400-27,900 rupiah ($2.98-$3.03) a kg on Thursday, beating the historic high of 26,700 rupiah a kg set in the middle of June.
"Local prices gain purely because of cocoa futures. Supply-demand in the local market has little impact now on prices," another dealer in Sulawesi said.
On the supply side, farmers and merchants in Sulawesi delivered between 400-600 tonnes of cocoa beans a day from their plantations to Makassar, in line with previous weeks, even though the main harvest is well under way. Dealers have blamed wet weather and the spread of a deadly fungal disease -- vascular-streak dieback (VSD), which attacks branches, leaves, and trunks -- for a smaller harvest this year.
Regular shipment of cocoa beans of between 3,000-4,000 tonnes a week to Malaysia, Southeast Asia's largest grinder, is still ongoing but there was no big shipment to the United States, which in past years had been a top buyer of Indonesia cocoa beans.
"Rising cocoa prices and freight rates have prompted U.S. grinders to switch to African beans and not buy Indonesian beans," said one of the Makassar dealers.
Cocoa bean exports for January-April this year fell 11.5 percent to 37,004.54 tonnes, from 41,813.43 tonnes in the same period a year ago, data from the Indonesian Cocoa Association for the South Sulawesi branch show.
The Indonesia Cocoa Association has estimated the country may export 290,000 tonnes of cocoa beans this year, down slightly from about 300,000 tonnes in 2007, as disease and pest attacts cut output.
Indonesia, the world's third-largest cocoa producer, has been struggling to increase its output as ageing cocoa trees have made the plant vulnerable to pest attacks.
Cocoa beans are sold to grinders for processing into butter and cake, which is later pressed into powder to make chocolate, cakes, beverages and ice cream.