Cocoa price climbs after Ouattara calls for export ban
The internationally recognised winner of Cote d’Ivoire's presidential election, Alassane Ouattara, ordered a month-long ban on cocoa exports on Monday in an attempt to starve his rival Laurent Gbagbo of funding. Cocoa prices soared in reaction. Ouattara has called for a halt in exports to remain in place until 23 February.
Commodity analysts saw cocoa prices reach a one-year high on the New York Board of Trade and a five-month peak on the London futures exchange in trading on Monday.
“Cocoa prices are reacting,” Kona Haque from Macquarie Bank told RFI. She said it could lead to a “major supply disruption”.
Correspondent Marco Chown Oved in Abidjan said Ouattara’s announcement has “sown confusion at the ports” in the world’s biggest cocoa producer.
“Exporters are still loading cocoa beans onto ships,” Chown Oved told RFI, although these exports were all registered and paid for before Ouattara’s call for a ban.
The ban was declared in a statement signed by Ouattara’s prime minister Guillaume Soro. He warned traders who violated the ban that they would be considered to be “financing the illegitimate regime” of Gbagbo.
“Gbagbo controls from bush to port, all the intermediary points,” said Haque. “So if you are banning exports of cocoa, ultimately this will hit the finances of Gbagbo,” she added.
Cocoa accounts for about 20 per cent of Cote d’Ivoire’s Gross Domestic Product and a ban could seriously hamper Gbagbo.
However, it was dismissed by the Gbagbo camp. Spokesperson Ahoua Don Mello said it will have “no effect” on the ground, “it is we who are running the country, that is the reality”.
“In the coming days it will be evident whether the order will be followed and whether it will dig into Laurent Gbagbo’s bottom line,” said Chown Oved.
The effectiveness of any ban is likely to be decided by international cocoa buyers and whether they observe Ouattara’s order.
European cocoa grinders are approaching a particularly important time of the year.
“They’re coming up to towards the Easter period, when typically cocoa grinding tends to rise from a seasonal point of view because of increased chocolate demand,” said Haque.
She said smuggling could be a possibility, “to the extent that some suppliers need to get their cocoa out of the country”.
The European Union has said a trade embargo is a future option. The EU is already waiting for agreed sanctions to take effect.
Eleven economic entities will be affected, including the important cocoa exporting ports of Abidjan and San Pedro. This means that in principle EU ships and companies can no longer do business with them.