Alassane Outtara, the internationally recognized winner of the regions presidential elections, said he would continue using economic sanctions against political rival Gbagbo if he did not leave power by the time the export restriction expires on 23 February, reported the Financial Times.
The uncertainty regarding how long this ban will last and the impacts of this on future supply are currently underpinning the cocoa market, said analysts in Rabobank’s recent Agri Commodities monthly report
“In our view, the supply of cocoa is currently adequate, but if themed-crop supply from Ivory Coast, due to be harvested in April, is impeded, prices could surge further as many end users will have to come on the market to buy,” said Rabobank.
However, if stability is achieved in Ivory Coast, prices are expected to move sharply lower, said the analysts.
Continued ban
The move by Ouattara is an attempt to cut off funding from rival Laurent Gbagbo who is currently refusing to leave office despite Ouattara being widely accepted as Ivory Coast's legitimate leader.
“If Mr Gbagbo leaves, of course the ban will be removed. But if he stays on, I just think the ban will continue,” Mr Ouattara told the news source.
“The ban is on exports. The buying of cocoa from the farmers, this continues. The exporting companies should continue to stock them ... Cocoa can be stored for a long time. Clearly Mr Gbagbo will be out well before the cocoa starts getting rotten,” he said.
Price increases
Cocoa prices in London and New York surged over 10 per cent in January as Ouattara’s month-long exports ban on cocoa and coffee products produced a rush of fund-buying and short-covering on fears of a supply squeeze, said Rabobank.
However, in the report analysts said they expected a 142,000 tonne surplus for the 2010-11 October/September season to remain a dominant bearish factor in the market increasing ending stocks to five year highs and sending prices lower.
A cash cocoa trader told Reuters that the European chocolate industry seems to have good cocoa supply cover and is sitting out the ban in the hope shipments will resume in a couple of weeks. The trader reported that a steady supply of beans from the other main West African cocoa growing producer, Ghana, is offsetting the current lack of exports from the Ivory Coast.