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Ivory Coast Cocoa Exports May Have Been Delayed, Macquarie Says

Cocoa exports from Ivory Coast, the world’s biggest grower of the beans, may have been delayed by political instability following the West African nation’s disputed presidential election, Macquarie Group Ltd. said.

“There are reports that shipments are being delayed and cocoa is not flowing from the country,” Macquarie London-based analysts Kona Haque and Alex Bos wrote in the e-mailed report dated Dec. 3. “We fear that the country will spend a period of time disputing the results and both camps may engage in conflict in the interim.”

In the country’s main cocoa-producing regions, many farmers are supporters of the incumbent, Laurent Gbagbo, and “any fear of violence may prevent harvesting activity in the bushes or transporting of cocoa to the ports,” according to the report, while disruption caused by supporters of either side “will add an element of a risk premium to prices.” Even so, price gains may be limited because supplies are “better” than in past seasons.

Gbagbo was sworn in as president on Dec. 4 after the country’s Constitutional Council rejected the Electoral Commission’s vote count from the Nov. 28 runoff election, alleging vote rigging in some northern states. Hours later his opponent, Alassane Ouattara, said he had also taken the oath of office, citing the 54.1 percent of the vote the commission said he won. The United Nations, the European Union and the U.S. have all backed Ouattara.

National Divisions

The election was intended to unite the Ivory Coast, which has been divided between a rebel-held north and government-controlled south since 2002. Six people died and four were 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.

In the first six weeks of the season, farmers wary of violence reduced the amount of cocoa they transported to ports by 17 percent compared with the same period a year earlier, Macquarie said. When the first round of voting on Oct. 31 passed without any major incidents, arrivals at ports surged to 412,000 metric tons by Nov. 28, exceeding the 382,537 tons delivered a year before.

While deliveries to ports may decline due to the unrest, Macquarie said it expected exports to continue as “history shows us that cocoa beans have always made it to the port even at times of severe conflict, given that they remain the country’s main export revenue.”

‘Modest’ Surplus

Industry changes designed to boost Ivory Coast’s production of the chocolate ingredient, estimated at 1.3 million tons for the 2010-11 season that started Oct. 1, will “remain stalled until a new president is elected,” Macquarie said. Globally, a large expansion of cocoa output from Ghana, Brazil and Indonesia may mean a “modest” surplus this year even amid the turmoil in the largest producer.

Cocoa for March delivery gained 52 pounds, or 2.7 percent, to 2,011 pounds ($3,152) a ton as of 3:07 p.m. on NYSE Liffe in London, and earlier touched 2,013 pounds, the highest price since Aug. 27. Prices surged 4.5 percent last week, the biggest weekly gain since the week ending June 4.

Cocoa for March delivery on ICE Futures U.S. in New York gained $83, or 2.8 percent, to $3,018 a ton. Last week prices surged 5 percent, the most since the week ended July 16.

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