Futures Market News
Cocoa price rises amidst political sanctions
Jan 18, 2011 11:22 AM
Sanctions imposed on the Ivory Coast by the European Union initially caused prices for cocoa, sugar and coffee to rise, Bloomberg reports.
Vessels registered in the European Union are prohibited from taking on new financial acquisitions in Abidjan and San Pedro, two of the West African nation's primary ports for cocoa commerce, due to sanctions begun last week.
"This political development is perking up the market," Hector Galvan, a senior trading adviser at RJO Futures in Chicago, told Bloomberg.
Shortly after 11 a.m., coffee futures were up 0.6 percent, a $1.40 increase to $236 per pound. Sugar futures were up 0.71 percent, a 0.22 cent increase to $31.11 per pound. Cocoa increased 0.15 percent, a $3 increase to 2,008 per metric ton.
The disciplinary action was taken because the EU considers the government led by Laurent Gbagbo to be illegitimate and commerce, trading and exchanging the commodity helps fund that government. Gbagbo refused to step down after losing a national election to rival Allassane Ouattara.
Javier Almela, Spanish cocoa buyer Natra's chief purchasing manager, told Bloomberg that the soft commodity was now in backwardation as a result of traders' supply concerns.
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