Chocolate prices safer after Ivory Coast surrender

Chocolate price rises are likely to end now besieged Ivory Coast President Laurent Gbagbo is negotiating an exit path with UN authorities in Abidjan, the country’s commercial capital.

Ivory Coast supplies a third of the world’s cocoa and nearly all shipments have stalled since open conflict broke out after a UN-supervised election late last year.

President Gbago lost but refused to give up power to president-elect Alassane Ouattara, who called for an export ban cocoa and who has the support of the UN.

A few hours ago, French Foreign Minister Alain Juppe told the National Assembly in Paris: "We are very close to convincing him [Gbagbo] to leave power."

The UN says three generals loyal to Mr Gbagbo are negotiating terms for surrender in return for guarantees of safety for him and themselves.

Cocoa futures prices in New York immediately dropped to a low of $US2927 a ton and prices in London have fallen to $US3044 a tonne, their lowest point in three months.

Cocoa dealers say an end to the conflict could herald the swift release of a 500,000-ton stockpile on to the market. With about 350,000 tons of this held in port warehouses, the majority of supplies could reach Europe within six weeks, they said.

The European Union has a trade embargo against Ivory Coast and this is likely to be removed quickly when Mr Outtara takes control.

His election sparked a conflict that has left thousands of dead and displaced more than a million people, according to UN agencies.

World cocoa production is expected to post a 120,000-ton surplus this year, equivalent to about 3% of annual demand, according to figures from the International Cocoa Organisation.

Traders have predicted prices could fall to $US2200 a ton once the Ivorian stockpile is released.

Once the most prosperous country in West Africa, Ivory Coast sank into chaos and mayhem under President Gbagbo, who refused to recognise the election held five years after a vicious three-year civil war that ended in 2002.

French-speaking Ivory Coast has recently come largely under the control of Mr Ouattara’s Forces Nouvelles, which has the backing of UN peace-keeping troops and French air power, but militia loyal to Mr Gbagbo have put up a strong resistance in their Abidjan stronghold.

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Source: National Business Review