Cocoa prices surge as Ivory Coast crisis deepens

YAMOUSSOUKRO (Commodity Online) : Continuing political crisis in West Africa’s Ivory Coast continued to hit its lucrative cocoa exports.

Cocoa prices jumped 7.4 per cent on Tuesday morning in London, reaching GBP2,307 ($3,638) per ton in response to the announcement. They have since stabilized at GBP2,211 ($3,503), an increase of 2.9 per cent on yesterday's price.
Cocoa futures for the March delivery market reached $3,311 per ton, their highest level in a year.
New York ICE second-month cocoa futures jumped more than four per cent to a one-year high of $3,340 a ton. Prices went up by $137 in New York and GBP60 in London.
If the trend continues, it could lead to an increase in the price of chocolate, reports quoting experts say.
Some cocoa exporters said they were conducting business as usual while awaiting clarity on a call by presidential claimant Alassane Ouattara to ban exports.
Uncertainty over supplies from the crisis-stricken West African state, which produces more than a third of the world's cocoa beans pushed cocoa futures to a one-year high early on Monday.
Ivory Coast has been in turmoil since incumbent leader Laurent Gbagbo rejected U.N. certified results of a November 28 election showing he lost to Ouattara, triggering a standoff that has killed 260 people and threatens to restart a civil war.
Ouattara, who has formed a parallel government in an Abidjan hotel protected by a ring of U.N. peacekeepers and blockaded by Gbagbo forces, called over the weekend for a one-month ban on cocoa exports to squeeze Gbagbo's funding.
Cocoa is seen as important to Gbagbo's grip on power, providing about $1 billion per year in revenues to the state, according to some estimates.
The call by Ouattara adds to other attempts to starve Gbagbo of cash, including an effort the West African regional central bank to block his access to state accounts and a financing freeze by the World Bank.
Gbagbo's camp has brushed off efforts to cut its cash-flow and said on Sunday its new partners in Asia, Latin America and Africa would help it sidestep the pressure.
Regional bloc ECOWAS and the African Union have attempted mediation to convince Gbagbo to step down, and have said a military intervention may be possible if other measures fail.
The European Union had earlier imposed sanctions banning EU vessels from new business with Ivory Coast ports, but the move did not amount to an embargo on cocoa trade.
Ivory Coast cocoa output is running about 11 percent higher than last year, exporters estimated on Monday, with official figures showing port arrivals about 9 percent higher than last year.(reuters).

(Source: http://www.commodityonline.com/news/Cocoa-prices-surge-as-Ivory-Coast-crisis-deepens-35952-3-1.html)