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Monday, January 24, 2011

Cocoa prices jump as Ivory Coast weighs export ban

Cocoa prices jump as Ivory Coast weighs export ban ; LONDON (AP) — Cocoa prices shot higher on Monday after the internationally recognized leader of Ivory Coast, the world's largest producer of cocoa beans, called for a one-month ban on exports. The political turbulence added to pressures on the retail price of chocolate treats.

Cocoa futures on the Liffe commodities' exchange in London were up 3.9 percent Monday to 2,223 pounds per ton, the highest since early August, after trading as high as 2,290. Cocoa traded as low as 1,770 pounds in November.

Prices have risen 12 percent since Jan. 5, according to a research note from Commerzbank.

The export ban was proposed by Alassane Ouattara as a move to choke off funding for the incumbent, Laurent Gbagbo, who has refused to concede defeat.

It is unclear whether the ban will be heeded by cocoa growers or how it will be enforced.

Marcia Mogelonsky, U.S.-based global food analyst for Mintel, said retail chocolate prices are destined to rise even if the political situation in Ivory Coast stabilizes in the next few weeks.

"The prices will go up because cocoa is now more expensive," and the price of sugar is also rising, Mogelonsky said. Manufacturers, she added, had held the line on prices during the recession.

More recently, she said, some manufacturers have, in effect, been raising chocolate prices by shrinking the size of their products. Ivory Coast exported $2.53 billion worth of cocoa in 2009, according to government statistics. Ivory Coast's production has been declining, from 38 percent of global production in 2007-2008 to 33 percent in 2009-2010, according to the International Cocoa Organization.

In a joint statement, the Brussels-based European Cocoa Association and the Federal of Cocoa Commerce Ltd. in London said they hoped for a quick resolution of the political tensions.

"Time, patience and a commonsense approach to the difficulties and delays that may arise are required, but most importantly, all those whose interests are impacted should remain calm in order that we sustain no long term damage to Ivorian farming communities and the cocoa industry," the two industry groups said. Harvey Cabaniss, who owns specialist chocolatier Verde & Co. in London, was resigned to higher costs.

"I've been selling these chocolates for almost the last seven years and believe me this isn't the first and it isn't the last thing that's going to impact the actual price of cocoa beans because it's been going up and up and up."

Cocoa, he said, comes from "probably not the most stable areas of the world, and I think that's why its always going to be a volatile product."

Cocoa Jumps to One-Year High as Ivory Coast Leader Bans Exports
Jan. 24 (Bloomberg) -- Cocoa climbed in New York to the highest price in almost a year after the president-elect of Ivory Coast, the world’s largest producer, barred exports for a month. Read More...

African Union May Use Sanctions, Isolation to Force Gbagbo Out of Office
The African Union will this week discuss using diplomatic isolation and economic sanctions to force Ivory Coast leader Laurent Gbagbo to relinquish power following a November election the continental body says he lost. Read More...

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Ivory Coast's incumbent government says it is not intimidated by threats to be removed from power by a regional intervention force. West African leaders have replaced the head of the region's central bank to further isolate the incumbent president in favor of the internationally-recognized winner of November's vote. Read More... For the latest updates PRESS CTR + D or visit Stock Market news Today

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