Cocoa futures surged the most in 10 weeks Wednesday after the president of Ivory Coast, the world’s largest producer, dissolved the nation’s government.
President Alassane Ouattara dissolved the government after members of the ruling coalition opposed a new law, said Amadou Gon Coulibaly, the general secretary of the presidency. Cocoa climbed to a 32-year high in March 2011 as supplies were disrupted by a civil war. The conflict left at least 3,000 dead following ex-leader Laurent Gbagbo’s refusal to cede power to Ouattara after a November 2010 election.
“Seeing the government dissolved is a surprise to the market,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a telephone interview. “If we don’t see a quick resolution, we run the risk of seeing cocoa supplies disrupted.”
Cocoa for March delivery jumped 2.9 percent to settle at $2,457 a metric ton at 12:04 p.m. on ICE Futures U.S. in New York, the biggest advance since Sept. 5. Earlier, the price reached $2,469, the highest since Nov. 7.
The Parti Democratique de Cote d’Ivoire, or PDCI, and the Union pour la Démocratie et la Paix en Côte d’Ivoire, or UDPCI, yesterday rejected a bill proposing that women have the same rights as men to head a family, Gon Coulibaly said.
Ivory Coast produces about 40 percent of the world’s supplies, according to the International Cocoa Organization in London. The beans represent 20 percent of the country’s gross domestic product, according to Maplecroft, a risk-analysis company based in Bath, England.
“It is the unknown that causes the rise,” Judy Ganes- Chase, the president of J. Ganes Consulting, said in an e-mail from Chicago. “The ‘what if’ scenarios rather than any actual problems.”
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