• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Daniels Trading

Independent. Objective. Reliable.

Top Navigation

  • Open a Futures Account
  • Sign Up
  • Log in
  • 1.800.800.3840

Primary Navigation Menu

  • About
    • Who We Are
    • Services
    • Careers
    • Risk Disclosure
    • COVID-19
  • Trade
    • Broker-Assisted
    • Self-Directed / Online
    • Request Pricing
  • Hedge
    • DanielsAg Mobile App
    • Ag Marketing Plan
    • WASDE Analysis
    • Grain Resources
    • Livestock / Dairy Resources
    • Hedging Videos
    • Request Pricing
  • Invest
    • Automated Strategies
    • Managed Futures
    • Request Pricing
  • Advisories
    • GENERAL / FUNDAMENTAL
      • DT Newsletter
      • Insider Market Advisory
      • Turner’s Take Newsletter & Podcast
    • TECHNICAL ANALYSIS
      • The Cullen Outlook
      • Data Feed Trade
      • Jarboe Trading Journal
      • Trade Spotlight
    • AG MARKETING
      • Cattleman’s Advisory
      • The Swine Times
      • Technical Ag Knowledge
      • This Week in Grain
      • Turner’s Take Ag Marketing
    • THIRD-PARTY RESOURCES
      • CFRN
      • Moore Research Center, Inc. (MRCI)
      • OptionWorks®
      • TASMarketProfile.com
  • Education
    • CME Group Resource Center
    • Small Exchange Resources
    • Guides
    • Frequently Asked Questions
    • Order Entry Handbook
    • Webinars
  • Blog
    • Futures 101
    • Ag Marketing
    • Tips & Strategies
    • Trading Advisories
  • Resources
    • Trading Software
    • Quotes and Charts
    • Futures Calendars
    • Contract Specifications
    • Margin Requirements
    • Futures Calculator
  • Accounts
    • GAIN Capital Futures
    • StoneX
  • Contact
Home / Futures Blog / West Africa’s political crises

West Africa’s political crises

February 16, 2011 by Daniels Trading

West Africa isn't known for its political stability – but events in this critical region threaten to throw the whole area into chaos, with profound political and economic repercussions.

Currently, the two hotspots are the Ivory Coast and Nigeria. The former only recently emerged from decades of brutal and intractable civil war, and that conflict may yet flare up if the current political crisis cannot be resolved. In an election widely regarded as fair and untainted, candidate Allassane Ouattara defeated incumbent Laurent Gbagbo. President Gbagbo has resisted, calling the election fraudulent and refusing to step down from office.

A political standoff has developed, with the country's vital cocoa-exporting industry in disarray. Some farmers loyal to Gbagbo are seeking new venues for selling their crops, Bloomberg reports, as European traders adhere closer to Ouattara's request to embargo his own country's exports.

Ouattara wants to lock down the cocoa trade because it provides the embattled Gbagbo with cash and resources to continue resisting. 

The standoff has dragged on for nearly three months, and nearly 300 Ivorian citizens have died as a result of clashes between the factions. Economically, it's also a disaster, with a complete lockdown in the Ivorian economy, as banks and trading houses end up shuttered by the chaos.

"This is a significant setback for Gbagbo’s administration," Samir Gadio, an emerging market strategist at London's Standard Bank, wrote in an investment note. "The financial system has virtually come to a standstill, which is likely to erode the regime’s base of support going forward, especially if public and private sector salaries are not serviced later this month."

Earlier in the year, cocoa futures stood below $2,900 per metric ton; they've now surged to $3,412 per metric ton, driven by the continuing shortage of beans on the market. 

The other troubled African nation is Nigeria, which is also struggling with a legacy of violent resistance and resource wars. There are two separate political problems in Africa's most populous nation. The first is the ongoing rebellion in the Niger Delta, which contains most of the country's oil wealth. A combination of corruption, exploitation and negligence have ruined the environment, pillaged the natural wealth of the region and wasted vast amounts of resources.

In an unrelated issue, Nigeria is riven by a religious and ethnic conflict which pits the largely Muslim north of the country against the mostly Christian southern states.

The country has an election scheduled for April. A Muslim group called Boko Haram, which models itself on Afghanistan's Taliban, is engaged in terrorism and guerrilla warfare, news sources report.

"Boko Haram's strategic focus is to attack institutions of the state to discredit it," Jude Uzonwanne, the Nigeria strategist for Monitor Group, an investment advisor, told Bloomberg. "They're likely to intensify the attacks as the elections come closer and it becomes a guessing game how it will end."

Some see the problem as essentially economic, since the agricultural and nomadic residents of northern Nigeria have seen much of their fertile land overrun by desertification and have experienced few of the benefits of the country's oil wealth.

"These people are now using violence on a religious platform to address their social and economic exclusion," Peter Egom, an analyst at the Nigerian Institute of International Affairs in Lagos, told the news service.

As Africa's largest producer of oil, Nigeria and its political struggles have an outsize effect on global energy markets. Outright civil war in Nigeria could provoke shortages and a price spike.

Brent crude oil futures for April delivery rose 2.014 percent to $103.73 per barrel today. West Texas intermediate light, sweet crude futures gained 0.318 percent to $87.85 per barrel.

Overall, African political volatility may continue to create bullish momentum for commodities as supplies look uncertain.

Risk Disclosure

This material is conveyed as a solicitation for entering into a derivatives transaction.

This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.

Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.

You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.

Filed Under: Archived News

About Daniels Trading

Daniels Trading is an independent futures brokerage firm located in the heart of Chicago’s financial district. Established by renowned commodity trader Andy Daniels in 1995, Daniels Trading is built on a culture of trust committed to the firm’s mission of Independence, Objectivity and Reliability.

Primary Sidebar

Get Blog Updates

Subscribe to our blog and receive a daily email with information on market insights, trading tips & strategies.

Trustpilot

Footer

Site Navigation

  • Frequently Asked Questions
  • About Us
  • Customer Reviews
  • Contact Us
  • Futures Blog
  • Open a Futures Trading Account
  • Media Resources
  • Fund Your Account
  • Legal Notices

Contact Us

Daniels Trading
100 South Wacker Drive, Suite 1225
Chicago, IL 60606
+1.312.706.7600 Local / Int'l
+1.800.800.3840 Toll-Free
+1.312.706.7605 Fax

Connect with Us

Trustpilot

Copyright © 2021 · Daniels Trading. All rights reserved.

Risk Disclosure

This material is conveyed as a solicitation for entering into a derivatives transaction.

This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.

Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.

You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.

  • Risk Disclosure
  • Privacy Policy
  • California Residents Privacy Notice
  • Terms of Use
  • Back to top