It’s deja vu for cocoa traders as tensions erupt in Ivory Coast
Synopsis
Ivory Coast issued an arrest warrant for opposition presidential candidate.
By Bloomberg
Political tensions flaring up in the world’s largest cocoa producer sent New York futures up the most in more than a month.
The move on the threshold of an election year fueled fears of political instability.
The last time Ivory Coast had a disputed election was in 2010, when then President Laurent Gbagbo refused to cede power to Alassane Ouattara. Tensions ended up resulting in a civil conflict and a ban on cocoa exports that sent global prices soaring.
“The fundamentals of the market remain good, with plenty of cocoa ready to come out,” said Jack Scoville, vice president of Chicago brokerage Price Futures Group.
Cocoa futures surged as much as 4.6 per cent in New York, the most since Nov. 12. Prices settled 3.8 per cent higher at $2,497 a metric tonne. In London, futures surged as much as 3.7 per cent.
Friday’s rally may help cocoa end the year with a gain. The commodity, which until Thursday was little changed for 2019, is now heading for an annual price increase of 3.4 per cent in New York. Still, demand in Europe remains weak, said Peter Mooses, a senior market strategist at RJO Futures in Chicago.
“Although the global tone and negative political news is causing a rally today, I don’t see it lasting long unless this uneasiness doesn’t pass,” he said.
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Ivory Coast issued an arrest warrant for opposition presidential candidate Guillaume Soro, accusing the former rebel leader of preparing a coup.The move on the threshold of an election year fueled fears of political instability.
The last time Ivory Coast had a disputed election was in 2010, when then President Laurent Gbagbo refused to cede power to Alassane Ouattara. Tensions ended up resulting in a civil conflict and a ban on cocoa exports that sent global prices soaring.
“The fundamentals of the market remain good, with plenty of cocoa ready to come out,” said Jack Scoville, vice president of Chicago brokerage Price Futures Group.
Cocoa futures surged as much as 4.6 per cent in New York, the most since Nov. 12. Prices settled 3.8 per cent higher at $2,497 a metric tonne. In London, futures surged as much as 3.7 per cent.
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Friday’s rally may help cocoa end the year with a gain. The commodity, which until Thursday was little changed for 2019, is now heading for an annual price increase of 3.4 per cent in New York. Still, demand in Europe remains weak, said Peter Mooses, a senior market strategist at RJO Futures in Chicago.
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“Although the global tone and negative political news is causing a rally today, I don’t see it lasting long unless this uneasiness doesn’t pass,” he said.
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