* Cocoa market propelled as confusion escalates
* Cargill suspends purchases of Ivorian cocoa-company source
* Coffee dips after 4 pct rally on Friday
(Adds trader comments, news, updates prices)
By David Brough and Anna Yukhananov
LONDON, Jan 24 (Reuters) - ICE cocoa hit a one-year high on
Monday after Ivory Coast's presidential claimant Alassane
Ouattara urged a month-long ban on exports from the top producer
to stop cash reaching rival Laurent Gbagbo. [ID:nLDE70N13F]
Arabica coffee futures on ICE eased in a technical
correction and remained within sight of a 13-1/2-year peak after
jumping more than 4 percent on investment fund buying in the
previous session. ICE raw sugar futures remained rangebound
below a 30-year high, supported by tight supplies.
Dealers said cocoa prices were surging as the international
market was thrown into turmoil on uncertainty over the potential
impact of the call by Ouattara -- internationally recognised as
the victor of a Nov. 28 election -- given that incumbent
Laurent Gbagbo controls the supply pipeline to ports.
Cargill [CARG.UL] has temporarily suspended cocoa bean
purchases from top grower Ivory Coast, the U.S. agribusiness
company said in a statement on Monday. [ID:nLDE70N1W8]
Liffe May cocoa futures LCCc2 jumped over 7 percent to a
six-month peak of 2,269 pounds ($3,616) per tonne after the
opening, and were up 2.5 percent at 2,167 a tonne at 1531 GMT.
ICE May cocoa CCK1 jumped 3.1 percent or $99 to $3,272 per
tonne at 1531 GMT, having earlier touched a one-year peak of
$3,340 per tonne.
"The headlines in Ivory Coast are attracting lots of
speculative buying and fund buying," a London-based commodities
trader said. "Until things get clearer, I would say we're going
to be holding on to the gains of last week and today."
Ouattara, who is in a hotel guarded by U.N. troops, said in
the statement on Sunday anyone contravening the ban would be
liable to sanctions.
But Ouattara's power to enforce them was in question as
Gbagbo, who has appointed an administration and rejected
pressure to step down, was likely to do everything possible to
facilitate exports to generate cash to pay the military and
state workers.
Two European cocoa industry associations said on Monday they
were still seeking clarification on the export ban, and cocoa
exporters in Ivory Coast said they were conducting business as
usual while awaiting clarity on the ban. [ID:nLDE70N0JM]
[ID:nLDE70N124]
A European Union embargo on Ivory Coast cocoa trade is
unlikely for now because of the potential cost to the country's
population, a spokeswoman for the EU's foreign policy chief
Catherine Ashton said on Monday. [ID:nLDE70N1BY]
Dealers said that if exporters follow Cargill and respect
Ouattara's call for an export ban, there will be less
availability of cocoa on the international market, which could
send cocoa prices soaring.
"If (the ban) is enforced prices of cocoa will go through
the roof," Gary Mead, analyst with the VM Group in London, said
of Ouattara's call. "If he's serious, if they can enforce such a
trade embargo, the disruption would be huge."
But others were far more sanguine as they expected that
beans would continue to flow despite the political impasse.
Romain Lathiere, a fund manager with Swiss-based Diapason
Commodities Management, said: "In the end, the exporters are
still going to be able to export. Cocoa will transit to Ghana,
or other countries, and will still get out."
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Graphic link.reuters.com/bak67r
Indonesia cocoa not seen as substitute [ID:nL3E7CO06P]
Reuters Insider: Risk of Correction Seen in Cocoa Market
Arabica coffee futures slipped lower in a technical
correction after jumping as high as $2.4180 per lb on strong
fund buying on Friday, close to their 13-1/2-year peak.
"On Friday we saw very very strong buying, and the fact that
prices have eased today is not a surprise," a London-based
trader said.
ICE March arabicas KCc1 fell 1.4 percent or 3.3 cents to
$2.3710 a lb, below $2.4450 a lb, the 13-1/2-year high from Jan.
12. Liffe March robustas LRCH1 fell $19 to $2,130 a tonne.
Arabica markets have been supported by limited supplies of
high-quality Colombian beans and rising demand in
non-traditional markets such as China and India.
London white sugar futures rose, with prices hovering below
the Dec. 29 30-year peak, supported by uncertainty about Indian
sugar exports and heavy rainfall in key exporter Australia.
News that leading sugar importer Russia could cut its sugar
import tax in March has also helped March futures, said Nick
Penney, analyst at Sucden Financial, in a note. [ID:nLDE70K0A5]
ICE March raw sugar SBc1 was flat at 32.33 cents a lb,
slightly below its 30-year high of 34.77 cent a lb, from Dec.
29, while London march white sugar LSUH1 rose 0.7 percent or
$5.40 to $796.10 a tonne at 1531 GMT.
* Prices as of 1538 GMT
Product Last Change Pct Move End 2010 Ytd Pct
ICE sugar 32.33 0.00 +0.00 32.12 0.65
ICE coffee 238.65 -3.55 -1.47 241.80 -1.30
ICE cocoa 3262.00 89.00 +2.80 3052.00 6.88
Liffe sugar 796.50 5.80 +0.73 777.50 2.44
Liffe coffee 2126.00 -23.00 -1.07 2097.00 1.38
Liffe cocoa 2170.00 56.00 +2.65 2029.00 6.95
CRB index 334.21 0.22 +0.07 332.80 0.42
Crude oil 88.06 -1.05 -1.18 91.38 -3.63
Euro/dlr 1.36 0.00 +0.24 1.34 2.03
* ICE sugar and ICE coffee in cents per lb; ICE cocoa, Liffe
sugar and Liffe coffee in dollars per tonne; Liffe cocoa in
pounds per tonne
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