Risks to cocoa supplies from Ivory Coast are real and living conditions are not normal for people in rural cocoa growing areas, Jean-Marc Anga, Executive Director of the International Cocoa Organization, said on Wednesday.
"Short term the risk is real," Anga told Reuters in a telephone interview hours after returning from Ivory Coast, the world's top cocoa producer, where a disputed election has aroused political tensions. Referring to concerns over supplies from Ivory Coast, Anga, who is Ivorian, said that market fundamentals rather than speculation do explain this week's rally in ICE and Liffe cocoa futures markets to four-month peaks. "I think that this is one of the very few instances where the rally in prices can be attributed to fundamentals," Anga said.
"The speculators are probably compounding a volatile situation."ICE second-month cocoa futures eased on Wednesday from Tuesday's four-month high as investors locked in gains in a nervous market and continued to eye Ivory Coast tensions following the disputed presidential election.
ICE second-month cocoa closed at $3,035 per tonne on Wednesday, down $49, having touched a four-month high of $3,140 per tonne on Tuesday. Liffe second-month cocoa settled at 2,009 pounds, down 29 pounds, in moderate volume of 8,640 lots on Wednesday, having hit a four-month peak of 2,081 pounds on Tuesday.
The West African regional bloc ECOWAS recognised Alassane Ouattara as Ivory Coast's president-elect on Tuesday after a disputed ballot and urged incumbent Laurent Gbagbo to accept defeat. Anga said Abidjan port was operating normally, but said disruptions to living conditions in rural cocoa-growing areas raised concerns about future supplies to ports. "People (in rural areas) are going about their lives, but they are doing so very gingerly," Anga said.
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