The battleground for cocoa spikes prices
City Index January 24, 2011 5:26 PM
<p>The recent move higher for cocoa prices has been driven by uncertainty over cocoa production within the Ivory Coast – the world’s largest producer of […]</p>
Investors hate uncertainty and it is safe to say that there is a high amount of uncertainty and confusion about exactly what the impact on cocoa exports is going to be after Mr Ouattara’s call to ban exports.
The tactic from the man who is internationally recognised as the Presidential election winner is an attempt to starve cash from incumbent Mr Gbagbo. It is firmly looking like the battle to take over the presidency could be as much a battle to control cocoa exports which incumbent Mr Gbagbo relies on to pay for the army and state workers to maintain his grip on power.
All of this is helping to drive the price of cocoa to a new yearly high and whilst the uncertainty over production and exports continues, this is likely to keep cocoa prices inflated. Traders buying into the rally need to be aware of price dips as any bouts of profit taking could drop prices sharply.
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