Bloomberg
Ivory Coast's Ouattara Orders Extension of Cocoa-Export Ban
February 22, 2011, 11:37 AM EST(Updates with analyst price estimate in fifth paragraph, escalating violence and banking system starting in sixth.)
Feb. 22 (Bloomberg) -- Ivory Coast's Alassane Ouattara, internationally recognized winner of November's presidential election, will extend a ban on cocoa exports, an adviser to his administration said.
More information on the extension will be available later, Malick Tohe said in an interview from Abidjan today. The country is the world's biggest cocoa producer.
The ban was imposed for a month until tomorrow to cut off funds to incumbent President Laurent Gbagbo, who refuses to step down. Before today, cocoa prices climbed 9.9 percent since the halt was ordered. The beans reached the highest level since January 1979 in New York trading today.
"There is a risk that farmers will not have enough money," said Kona Haque, an analyst at Macquarie Group Ltd. in London. "The situation is getting dire."
Cocoa for May delivery rose as high as $3,608 a metric ton on ICE Futures U.S. and was up $84, or 2.4 percent, at $3,583 by 11:16 a.m. New York time. Prices may reach $3,700 in a month, Haque said.
As many as 19 pro-Ouattara protesters have died in violence since Feb. 19, the opposition coalition RHDP said yesterday. At least 300 people have been killed in clashes since the vote, according to the United Nations.
Paying a Premium
"With protestors being killed yesterday and the general fear in the market that the Ivory Coast situation will not work itself out, it is becoming harder to get beans out of the country and traders are willing to pay a premium," Connor Noonan, an analyst at Castlestone Management Ltd. in London, said by e-mail earlier today.
Ivory Coast's banking system is suffering from a lack of liquidity. Standard Chartered Plc, Citigroup Inc., BNP Paribas SA and Societe Generale SA have closed their local units. The Central Bank of West African States demanded that lenders in the region halt all transactions with its agencies in Ivory Coast after Gbagbo seized their offices.
"A cash liquidity shortage has further hurt cocoa trading," Haque said in a report Feb. 18. "There is growing evidence that cash-strapped farmers are struggling to pay their workers and that tending to the April-September mid-crop may suffer."
The European Union last month froze assets of Ivory Coast's cocoa- and coffee-exporting ports, along with those of companies including the national broadcaster. The sanctions amounted to a "de facto export ban" on cocoa beans and products from the country, the European Cocoa Association and Federation of Cocoa Commerce Ltd. said Feb. 4.
--With assistance from Olivier Monnier in Abidjan and Jennifer M. Freedman in Geneva. Editors: Dan Weeks, Nicholas Larkin.
To contact the reporters on this story: Pauline Bax in Johannesburg at pbax@bloomberg.net; Isis Almeida in London at ialmeida3@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.
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