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Ivorian unrest, but no repeat of 2011 for cocoa markets so far
By William Clarke - Published 06/01/2017

The president of C'ote D'Ivorie, the world's top cocoa grower, is in emergency talks after a widespread military mutinty.

The news has raised fears of a repeat of the 2011 civil war, where political unrest disrupted cocoa exports and production, but markets have been sanguine so far, given the market is still dealing glutted with a backlock of supplies

The unrest began in Bouake, before spreading to Daloa and Korhogo, major urban centres of inland Cote D'Ivoire, although well away from the capital of Abidjan and the port of San Pedro.

Gunfire, the seizure of police weapons, and rebel roadblocks have been reported.

2011 all over again?

Although the movement, which does not have a clear leader, has yet to issue public demands, the Ivorian defence minister told media the soldiers were demanding salary increases.

Bouake, the country's second-largest city, was the stronghold of the rebellion which put current president Alassane Ouattara in power in 2011, after his predecessor refused to leave office.

C'ote D'Ivoire is the world's largest cocoa producer, accounting for about a third of the world's supply.

The 2011 unrest pushed cocoa prices to their highest levels in about 30 years, due to fears over supply disruption.

Little price response

But the price reaction to the unrest has been muted so far.

"If it had been the capital we would have seen a response," said Mr George.

Although the unrest is in the cocoa production area, Mr George noted that "warehouses, and the key exporting grinding areas there haven't been effected".

March cocoa futures in New York were up 0.3% in mid-day deals, at $2,268 a tonne.

Glutted market

And the whole cocoa supply chain is currently glutted, meaning there is still cocoa for export.

"If anything there's too many beans available," said Mr George, noting reports of "beans building up at the ports," and "trucks building up at Abidjan and San Pedro".

"There's a hell of a lot of cocoa," Mr George said.

And aside from the unrest, there is no other threat to production so far, with the winter harmattan winds which can damage the crop relatively mild so far this year.

Mr George said that Ivorian producers were on track for a "very good main crop," with no threat to the mid-crop so far.

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