Life returns to cocoa trade as EU lifts sanctions

(GETTY IMAGES)

Cocoa traders, once keen backers of Laurent Gbagbo's liberal attitude to international markets, welcomed his capture yesterday and cheered the European Union for lifting trade sanctions.

The price of cocoa has risen sharply since last November's presidential election when Mr Gbagbo refused to leave office, despite Alassane Ouattara being internationally recognised as the victor. By early March, cocoa prices hit 34-year highs of $3,775 (£2,321) a tonne as the blockade on cocoa from Ivory Coast – the world's biggest producer – began to bite.

But in recent weeks, as Mr Ouattara's militia made ground, prices have again fallen. By Monday the commodity was trading at a little above $3,000 a tonne after the EU said sanctions would be lifted.

"We welcome the EU decision to lift the EU sanctions," said a joint statement from the European Cocoa Association and the Federation of Cocoa Commerce. It added: "A prompt resumption of cocoa activities will bring a much-needed focus in the lives of the hundreds of thousands of people engaged in the Ivorian cocoa trade."

Danish shipping group Moeller-Maersk is expected to dock in Ivory Coast today to load the first shipment of cocoa since sanctions were lifted. Traders had feared spiralling prices, especially after it was suggested last month that stocks held at ports were likely to rot. This prompted speculation that a number of financial institutions, concerned about $1.3bn worth of stock, were preparing to pay taxes to Mr Gbagbo's administration – a move that would have strengthened his grip on power.

Last month Ricardo Leiman, chief executive of Hong Kong-based trading house Noble Group, told the Financial Times that if Mr Gbagbo was still in control by 31 March, the company would pay the export taxes.

However, a spokesperson for Noble Group told The Independent last night that the company "has not paid the tax according to international law and Noble abides by the legal framework. At the time of Mr Leiman's comments, Noble confirmed that it would act in accordance with the law."

Despite the easing of the cocoa prices, analysts have not predicted dramatic price falls now that Mr Gbagbo has gone.

With Ivory Coast's banks and ports still in turmoil, supplies of cocoa are unlikely to return to pre-crisis levels for some time.