Cocoa Falls as Gbagbo Orders Companies to Export; Coffee Drops

March 10 (Bloomberg) -- Cocoa fell for a third day in New York, the longest streak since January, after President Laurent Gbagbo ordered companies to export beans from Ivory Coast, the world’s largest producer. Coffee dropped.

Companies were told to export by the end of this month or face sanctions, according to Ahoua Don Mello, spokesman for Gbagbo’s government. Gbagbo refuses to leave office and took control of local cocoa purchases and exports three days ago, escalating a conflict with rival Alassane Ouattara, the internationally recognized winner of a November election.

“The market is a bit overbought in the near term, and a correction was needed,” Connor Noonan, an analyst at Castlestone Management Ltd. in London, said in an e-mail today. “This, coupled with Gbagbo announcing that he was going to export yesterday, has taken some of the initial fear of shortages out of the market.”

Cocoa for May delivery fell $83, or 2.4 percent, to $3,444 a metric ton at 7:37 a.m. on ICE Futures U.S. in New York. Prices reached $3,421, the lowest level since March 1. In London, cocoa for May delivery slid 47 pounds, or 2.1 percent, to 2,212 pounds ($3,570) a ton on NYSE Liffe.

“We’re not planning at all to seize the cocoa stocks, as they are the property of the companies,” Don Mello said yesterday. Sanctions would apply if exporters don’t pay the export tax, he said.

Ouattara ordered a month-long ban on cocoa-bean exports on Jan. 23 in a bid to cut off funds for Gbagbo that was later extended to March 15. Beans registered for export in the two weeks ended March 3 dropped 99 percent from a year earlier, according to port figures.

EU Sanctions

Gbagbo’s “decision has of course put the market lower, but merchants say cocoa is not exportable because of the European embargo,” Matthieu Dibaji, a soft-commodities broker at Kyte Group Ltd.’s Market Securities, said in an e-mail today. The European Union in January froze the assets of Ivory Coast ports that export cocoa and coffee.

Exports are “technically impossible because European banks refuse to make payments on cocoa operations in Ivory Coast,” Dibaji said.

Arabica coffee for May delivery fell 3.35 cents, or 1.1 percent, to $2.915 a pound on ICE Futures U.S. after yesterday reaching $2.9665, the highest price for a most-active contract since May 1997. Robusta coffee for May delivery declined $37, or 1.4 percent, to $2,520 a ton on NYSE Liffe.

European coffee stockpiles climbed 4.1 percent from a month earlier to 10.5 million bags as of Jan. 31, the European Coffee Federation said in an e-mailed report today.

Raw sugar for May delivery dropped 1.2 percent to 30.06 cents a pound on ICE. White, or refined, sugar for May delivery rose 0.3 percent to $753.50 a ton in London.

(Source: http://www.businessweek.com/news/2011-03-10/cocoa-falls-as-gbagbo-orders-companies-to-export-coffee-drops.html)