By Claudia Carpenter and Pauline
Bax - Jan 24, 2011 12:50 AM ET
Ivorian Export Ban May Drive Up Cocoa
Prices 10%, Hackett Financial Says
prices may advance by as much as 10 percent after the
president-elect of Ivory Coast, the world’s largest
producer, banned exports for a month, according to Hackett
Financial Advisors Inc.
Ouattara, the internationally recognized winner of the
Nov. 28 presidential election, suspended all cocoa and
coffee exports from today to cut off funds to incumbent
President Laurent Gbagbo. The country’s main exporters
agreed to the ban, Malick Tohé, an adviser to Ouattara’s
government, said by phone from Abidjan yesterday.
in chocolate, has climbed about 14 percent since the
elections on concern that unrest would disrupt supply.
Futures gains may help stoke global inflation after
food prices increased 25 percent last year and the poorest
nations paid as much as 20 percent more for imports,
according to the United Nations. The country’s production
is valued at about $3.8 billion at current prices, Bloomberg
“I can see
the speculators seeing this as a potential to make a
quick profit in an extremely bullish environment in
commodities,” Shawn Hackett, president of Hackett Financial
Advisors in Boynton Beach, Florida, said by phone yesterday.
“It might spike to the old high of $3,510,” a 30-year
peak reached in December 2009, he said.
at $3,184 a metric ton on ICE Futures U.S. in New York
last week. Speculators including hedge funds increased
their net-long position, or bets on higher prices, in
New York cocoa futures in the week ended Jan. 18, according
to U.S. Commodity Futures Trading Commission data.
was declared winner by the country’s Constitutional
Council, refuses to recognize Ouattara as the winner
of the vote. Ouattara is being protected by United Nations
troops at the Golf Hotel in Abidjan. The UN Security
Council authorized 2,000 more peacekeepers to the West
African nation on Jan. 19.
election triggered violence that has seen at least 260
people killed, according to the United Nations. Consumer
prices jumped, construction stopped and shops emptied
as people limited spending.
may begin to price in the risk that the political turmoil
will remain unresolved and prompt an extension of the
ban beyond one month, Ker Chung Yang, an analyst at
Phillip Futures Pte., said by phone from Singapore today,
as he predicted prices will advance to $3,400 a ton.
ban will likely set the tone for cocoa prices,” Ker
said. “There’s no sign that the political turmoil will
be resolved soon. These are the political risks that
investors may want to look at.”
the main origin of Japan’s cocoa-bean imports, according
to the Chocolate & Cocoa Association of Japan. Fujiya
Co., a Tokyo-based confectionery maker, sees little
impact from the halt, spokeswoman Yukiko Yoshioka said
today by telephone.
can be easily replaced” with other origins, she said.
The company has a contract with trading companies to
buy beans and has enough inventories in the short term,
cocoa production represents a third of global supply,
and is forecast to expand 1.9 percent this year, according
to Macquarie Group Ltd. Shipments by farmers to the
country’s ports from the latest harvest are about 2
percent below last season, the bank said Jan. 19.
in trading agriculture commodities and manages $20 million.
“I don’t think they can afford to not sell cocoa for
too long,” he said.
more than a quarter of the country’s export earnings.
On Jan. 15, the European Union imposed sanctions to
block trade between the EU and Ivory Coast.
Group of Ivory Coast Coffee and Cocoa Exporters was
not available for comment when called by Bloomberg News