Cocoa fell, capping the biggest weekly drop since May, on speculation that exports from Ivory Coast will increase after the government threatened to seize undeclared inventories.
Ivorian exporters have until March 31 to ship bean stockpiles or face “sanctions,” a spokesman for President Laurent Gbagbo said March 9. Gbagbo has refused to step down following a November election that international observers say was won by Alassane Ouattara, who has asked shippers to hold back exports as a way of denying funds to his rival. The government is also threatening to seize inventories not declared by today.
“The market is realizing there is still a lot of supply, as the situation in Ivory Coast is forcing suppliers to export in order to pay the domestic tax,” Jonathan Bouchet, an analyst at broker OTCex Group, said today by telephone from Geneva. Ivory Coast is the world’s biggest cocoa producer.
Cocoa for May delivery fell $33, or 1 percent, to settle at $3,412 a metric ton at 12:10 p.m. on ICE Futures U.S. in New York. Prices dropped 6.7 percent this week, the most since May 14.
In London, cocoa futures for May delivery lost 18 pounds, or 0.8 percent, to 2,226 pounds ($3,574) a ton on NYSE Liffe. Prices dropped 4.9 percent this week.
At least 365 people have died in political violence in Ivory Coast since the election, according to the United Nations. Gbagbo took control of local cocoa and coffee buying and exports on March 7 in a bid to force resumption of shipments.
In other hand, Global cocoa production will exceed demand by 119,000 tons in the season that started Oct. 1, compared with a shortage of 66,000 tons a year earlier, according to the London-based International Cocoa Organization.******
