Cocoa rose to a four-month high as supplies were disrupted by political unrest in Ivory Coast, the world’s biggest producer. Sugar and coffee declined.
Work at some cocoa-processing plants slowed because employees were sent home for their safety, according to officials in Ivory Coast’s commercial capital, Abidjan. Cargill Inc., a cocoa shipper in the country, said yesterday the unrest is causing “challenges both in terms of delivery of beans and logistics on the ground.”
“The question for the cocoa industry is whether there will be a physical disruption in the arrival of beans to the ports,” said Emmanuel Jayet, head of agricultural-commodity research at Societe Generale SA in London. Many farmers may “wait for the situation to stabilize” before delivering the crop, he said.
Cocoa for March delivery gained $19, or 0.6 percent, to settle at $3,084 a metric ton on ICE Futures U.S. at 2 p.m. in New York, after touching $3,140, the highest since Aug. 6. Prices surged 5 percent last week, the most since mid-July.
A 10 p.m.-to-6 a.m. curfew was extended by a week, Radiodiffusion Television Ivoirienne reported on its website yesterday. The curfew is limiting operations at ports.
Last month’s election, intended to unite the West African country, has turned into a standoff, creating an increasingly violent political crisis as both incumbent Laurent Gbagbo and challenger Alassane Ouattara claim victory.
Gbagbo was sworn in as president on Dec. 4 after the Constitutional Council rejected the Electoral Commission’s vote count from the Nov. 28 runoff election, alleging vote rigging in some northern states. The commission declared Ouattara the winner with 54.1 percent of the votes. Ouattara said he had also taken the oath of office and is backed by the UN, the European Union and the U.S.
Ivory Coast has been divided between a rebel-held north and the government-controlled south since an uprising in 2002. Six people died and four were seriously wounded in the central cocoa-producing town of Issia on Dec. 3, after pro-Gbagbo youths attacked shops owned by Ouattara supporters and looted a cocoa- bean warehouse, according to an opposition official who didn’t want to be identified for fear of reprisals.
During previous periods of unrest, the cocoa supply wasn’t disrupted for long because exports are vital to the country’s economy, Jayet said.
World production may exceed demand by 100,000 tons in the current season as rainfall increases and West African governments invest in the industry, the International Cocoa Organization said Oct. 13. Bean output will be 3.8 million tons, compared with demand of 3.7 million tons, Executive Director Jean-Marc Anga said.
Jayet said Ivory Coast’s crop is “excellent” and no one wants to disrupt the cocoa trade. “At the end, you will have this short-term volatility, but eventually these beans will likely reach the export position,” he said. Prices in New York are 8.7 percent lower than a year ago.
In London, cocoa futures for March delivery fell 7 pounds, or 0.3 percent, to 2,038 pounds ($3,215) a ton on NYSE Liffe, after earlier rising to 2,081 pounds, the highest level since Aug. 25.
Raw-sugar futures for March delivery declined 0.6 cent, or 2.1 percent, to 28.41 cents a pound in New York. Earlier, it had risen as much as 2.6 percent. In London, white-sugar futures for March delivery retreated $11.50, or 1.5 percent, to $723.30 a ton on NYSE Liffe, declining for the first time in five sessions.
Arabica-coffee futures for March delivery dropped 1.05 cents, or 0.5 percent, to $2.079 a pound in New York. Robusta- coffee futures for March delivery added $17, or 0.9 percent, to $1,877 a ton on NYSE Liffe, rising for the fifth time in six sessions.
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