Global cocoa prices surge after Ivory Coast ban

YAMOUSSOUKRO (Commodity Online) : Global cocoa prices took a jump on Monday after top producer Ivory Coast banned cocoa exports for a month.
A prominent faction in the politically divided west African nation led by Alassane Ouattara asked shippers to ban trade from Monday until February 23 in an attempt to starve opponent Laurent Gbagbo of funds.
Gbagbo, the incumbent president, is refusing to stand down despite losing internationally-recognised elections in November.
The prospect of a squeeze on supplies from a country which is responsible for more than one-third of world cocoa production raised expectations of a jump in prices of the bean in London and New York the futures markets.
"Traders may anticipate a jump in the price of cocoa on Monday," and further forwards too, said Ker Chung Yang at Phillip Futures in Singapore.
"Any reduction in supply is likely to push the price of the commodity used in chocolate towards a 33-year high because Ivory Coast accounts for about 40 percent of global cocoa exports."
New York cocoa, which closed on Friday at $3,184 a tonne, hit a record high of $5,379 a tonne in July 1977, after a knock-on effect from poor investment in the 1950s and 1960s led to a series of poor crops in the early 1970s.
Cocoa's stocks-to-use ratio, a key measure of a crop's supplies, and therefore of the prices it can command, halved from the start of the decade to a record low of 18% by 1976-77.
London cocoa, which finished on Friday at £2,148 a tonne, set a record high of £3,410 a tonne.
Mr Ker added that he expected Ivory Coast exporters to bow to Mr Ouattara's order, adding that the ban could be extended further.
"Even if the export ban is lifted after February 23, we would expect the export process from Ivory Coast to be in limbo in the near term,"he said.
However, he noted the potential for Ivory Coast supplies to reach international markets by being smuggled through neighbouring Ghana.
Separately, the Federation of Cocoa Commerce and the European Grinders Association have sought clarity from Ouattara on the export ban.

(Source: http://www.commodityonline.com/news/Global-cocoa-prices-surge-after-Ivory-Coast-ban-35901-3-1.html)