Ivory Coast: Cocoa prices spiral upwards as unrest continues

Cocoa has surged close to its highest price in 30 years after a call from Ivory Coast's internationally recognised leader yesterday for a one-month ban on exports of the commodity from the world's largest producer.

The statement from Alassane Ouattara's camp comes at the height of the cocoa export season. US food giant Cargill, which currently purchases around 15 per cent of Ivory Coast's cocoa, said yesterday it would comply with the demand. The country produces just over one-third of the global supply, worth $2.53 billion (about 1.6bn) in 2009.

Cocoa futures on the Liffe commodities exchange in London were at 2,223 per tonne, the highest since early August, after trading as high as 2,290. Cocoa traded as low as 1,770 in November.

The export ban was proposed by Mr Ouattara to choke off funding for the incumbent Ivory Coast president, Laurent Gbagbo, who has refused to concede defeat following an election.

The Brussels-based European Cocoa Association hopes for a quick resolution of the political tensions.

In a statement the group said: "Time, patience and a common sense approach to the difficulties and delays that may arise are required, but most importantly, all those whose interests are impacted should remain calm in order that we sustain no long term damage to Ivorian farming communities and the cocoa industry."

While the United Nations, EU, US and the African Union have endorsed Mr Ouattara's presidency, he is attempting to run the country from a hotel being protected by UN peacekeepers.

Mr Gbagbo, who has been in power for a decade, still controls the country's military and security forces.

Port authorities in Ivory Coast are believed to be staunchly pro-Gbagbo, but both men draw support from the West African nation's cocoa farmers.

The export ban is aimed at further stepping up pressure on Mr Gbagbo, who lost a key ally on Saturday when the president of the regional central bank resigned amid accusations that he was funnelling funds to Mr Gbagbo despite a bank order to cut him off from state coffers.

Mr Gbagbo appears to have enough money to honour civil service contracts as salaries began to be paid yesterday in the commercial capital of Abidjan. This is the second month that at least some of the salaries have been paid, but it is unclear how long Mr Gbagbo will be able to stay solvent with dwindling access to finances. Mr Ouattara's allies hope for mass defections if Mr Gbagbo cannot pay civil servants and soldiers in the military.

Mr Gbagbo's government has already tried to order UN peacekeepers out of the country, claiming they are no longer impartial after the UN certified election results showing Mr Ouattara won the 28 November presidential runoff.The UN Security Council voted last week to send an additional 2,000 troops.

The 15-nation West African bloc of countries known as Ecowas has threatened to oust Mr Gbagbo by force.

Nigerian newspaper ThisDay has published a guest editorial written by Nigeria's foreign minister, Odein Ajumogobia, calling on the UN Security Council to pass a resolution sanctioning the use of force to remove Mr Gbagbo.

"Gbagbo must be made to understand there is a very real prospect of overwhelming military capability bearing down on him and his cohorts," the column read. "It is only then that he will give serious consideration to the demands to step down."