Indonesian prices held steady after rains in the farmlands pointed to better development of cocoa pods, traders in Jakarta said.

The improved crop situation also helped stabilise the market in Malaysia, which saw prices falling slightly from Wednesday due to a stronger ringgit against the US dollar.

The ringgit was at 3.66 to a dollar on Thursday, compared to late Wednesday's level of 3.71.

Malaysian dealers said drought was still affecting development of cocoa in the country.

"There is very little rain in our growing areas and we are still relying heavily on imported cocoa beans from Indonesia," said a trader in Tawau, Malaysia's key cocoa growing area on Borneo island.

A farmer in Tawau said although cocoa required only moderate water to grow healthily, the rainfall in Tawau was not adequate to cover this.

"It rained only twice this week and it drizzled on both occasions,"said the farmer. "Last week, it did not rain at all."

On Wednesday, the Malaysian Cocoa Board quoted the Standard Malaysian Cocoa (SMC) 1A out of Tawau at an average of 5,627 ringgit ($1,537) a tonne, down 140 ringgit from Wednesday and up 27 ringgit from a week ago.

The SMC 1B out of Tawau was also priced 140 ringgit lower from Wednesday at 5,583 ringgit a tonne. A week ago, this grade was at 5,560 ringgit a tonne.Indonesian traders said their cocoa crop looked good with steady rains reported in areas outside Ujung Pandang, the provincial capital of the key growing area of South Sulawesi.

"The farmlands continue to experience steady rains," said one trader."We expect to undergo the harvest at the end of April because pods have started to ripen," said the trader.

Traders said prices for fair, average quality beans were generally stable at 12,000-13,000 rupiah/kg in line with a stable rupiah.

The currency was quoted at 8,525/8,575 against the dollar at 0520 GMT.

Traders said rains intermittentlyfell from five in the afternoon until nine in the evening.