Alassane Ouattara is internationally recognized as the victor of the late November election, but Laurent Gbagbo has not ceded victory, and he asserts his competing claim as he was named the winner by Ivory Coast's Constitutional Council. Ouattara ordered cocoa shipments stop, in an effort to sever funding to Gbagbo.
"Exports are being cut back, so there is a lot of uncertainty," Walter Hellwig, who helps oversee $17 billion at BB&T Wealth Management in Alabama, told Bloomberg. "Anytime there is a disruption in supply, whether it is politically generated or weather related, prices will be pushed on the upside."
By cutting off exports, Ouattara might contribute to sending the price of cocoa to $3,720 per metric ton, according to a Bloomberg survey.
Shortly after 9 a.m. on Tuesday, cocoa futures were up 0.33 percent, a rise of $11 to $3,323 per metric ton.
"It is certain that the ban will lead to speculators taking longer positions and, as not many are interested in selling in these circumstances, prices will rise until the situation calms down," Javier Almela, the chief purchasing manager at Spanish cocoa buyer Natra, told the news service.
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