Ivory Coast cocoa exports set to resume after Gbagbo capture

13th April 2011, Comments 0 comments

The world's top cocoa producer Ivory Coast is set to resume exports of the commodity after Laurent Gbagbo was finally ousted, with the currently soaring prices likely to fall as a result, analysts said.

"We do expect Ivory Coast cocoa exports to start making their way to export markets," Barclays Capital analyst Sudakshina Unnikrishnan told AFP.

"There has been a buildup in stocks which are awaiting exports but issues of financing and banking will need to be addressed before we witness normal exports flowing out."

Forces belonging to Ivory Coast President Alassane Ouattara, backed by French and UN troops, captured his besieged rival Gbagbo in Abidjan on Monday at the climax of a deadly five-month crisis.

Gbagbo, who had held power since 2000, refused to admit defeat in November's presidential election, leading to heavy bloodshed and looting on the streets of Abidjan -- capital of a country that supplies a third of the world's cocoa.

The unrest meanwhile halted the African nation's cocoa exports, causing the commodity's price to hit the highest level since 1979 on New York markets.

Cocoa futures struck $3,775 a tonne at the start of March before losing about 10 percent in value earlier this month as traders anticipated Gbagbo's capture.

Some 400,000 tonnes of cocoa beans have accumulated at key ports in Ivory Coast because of international sanctions that aimed to choke off Gbagbo's economic power and force him to step down from the presidency.

Ouattara, internationally recognised as the winner of Ivory Coast's recent election, sought to further reduce Gbagbo's fire-power by ordering a halt to cocoa exports.

"In the near term we would expect cocoa prices to ease further on Ouattara gaining control," said Unnikrishnan.

For now, Ivory Coast can look forward to reviving its economy after Europe on Tuesday granted Ouatarra a half-a-billion-euro inducement to secure economic revival.

Former colonial power France announced a cash injection of 400 million euros ($580 million), after which European Union development commissioner Andris Piebalgs produced another 180 million.

Already on Friday, the EU rescinded some of the sanctions imposed on the country following a request from Ouattara -- a move which the cocoa industry has applauded.

"We believe the decision by the EU to lift its restrictions to enable the resumption of exports from Cote d'Ivoire is a positive step towards helping the country and its people," US agribusiness giant Cargill said in a statement.

"We are seeking clarification from the Ivorian authorities about the process for resuming exports and a key element of this process is for the local banking system to restart."

A joint statement by the European Cocoa Association, confectionery organisation Caobisco and the Federation of Cocoa Commerce said that "a prompt resumption of cocoa activities will bring a much needed focus in the lives of the hundreds of thousands of people engaged in the Ivorian cocoa trade.

"We are confident that the international community will fully recognise the level of support and rebuilding of the economy and infrastructure that will be needed to facilitate a speedy recovery," they added.

© 2011 AFP

0 Comments To This Article