Cocoa prices surge on ICoast election uncertainty
The price of cocoa rocketed on Friday to the highest level since late October, as traders fretted over the impact of a disputed presidential election in top global producer Ivory Coast.
Ivory Coast was in lockdown, with all borders sealed and foreign broadcasts jammed, as President Laurent Gbagbo's allies rejected election results that showed him beaten by his rival.
On LIFFE, London's futures exchange, cocoa for March jumped to 1,960 pounds per tonne on Friday, hitting the highest level since October 25, before pulling back slightly.
The contract has won more than five percent in value over the past two days on the back of mounting uncertainty over the election.
And on the New York Board of Trade (NYBOT), cocoa for delivery in March rallied to 2,920 dollars a tonne on Thursday before tailing off. New York prices have gained more than six percent since Tuesday.
"Cocoa prices have thus reacted to events in Ivory Coast," said Commerzbank analyst Carsten Fritsch.
"The Ivorian electorate commission yesterday declared that the challenger had won the presidential election.
"The military have subsequently sealed off the country's air, land and sea borders. There are now fears that cocoa shipments of the world's largest cocoa producer could be affected."
On Thursday the electoral commission (CEI) announced that provisional results showed opposition leader Alassane Ouattara had beaten Gbagbo in the disputed polls by 54 percent to 46.
But top Gbagbo ally Paul Yao N'Dre, the head of the country's Constitutional Council which has the final say on elections, said the results were invalid since the commission had over-run the legal deadline for releasing its results.
The United Nations mission in the country has judged the polls sound overall.
However, world powers sharpened their warnings to Ivorian leaders to settle the dispute peacefully, but the chaos in the west African state deepened after days of bloodshed and fraud allegations that have disrupted the landmark vote.
The west African nation produced 1.242 million tonnes of cocoa beans in the past crop year 2009/10, which was 35 percent of global supply, according to data cited by Commerzbank.
"This year's main harvest has had a sluggish start despite the good forecasts beforehand," added Fritsch.
"Further delays to shipments are now possible because of the uncertainty after the elections."
© 2010 AFP