Cocoa prices in London surged to a three-month high on Monday as violence in Ivory Coast fuelled fears of disruption to supply from the world's biggest cocoa grower, traders said. "I have never seen an opening like this," one trader said. "People are worried about whether the cocoa for December delivery is going to get out."
London's December futures contract, the market benchmark, shot up almost 12 percent soon after opening to 1,019 pounds ($1,879) a tonne, its sharpest gain in at least five years.
Total volume in London reached 21,243 lots a bit after mid-day, more than three times average daily volume.
"Any story of clashes between protesters and the French will result in further reactions in the market. It doesn't look good...I can't see how anyone can unite the country now," Calyon analyst Jonathan Parkman said.
Futures also jumped in New York, where NYBOT's benchmark December contract was trading at $1,786 after rising as much as 11 percent to $1,810 soon after opening.
Prices began surging last week after the Ivorian army attacked rebel bases in the north of the country, a major blow to a fragile cease-fire ending a civil war that began in 2002.
French troops in Ivory Coast's main city of Abidjan fired into the air on Monday to disperse thousands of demonstrators massing to support the country's President Laurent Gbagbo, Reuters reported.
Gbagbo has appealed for an end to the mob violence which erupted after France destroyed most of the country's air force in retaliation for the killing of nine French peacekeepers over the weekend.
France, the former colonial power, retains a significant military presence and strong economic ties to the West African country.
Ivory Coast is the source of about 45 percent of the world's cocoa, and is expected to produce almost 1.5 million tonnes in the 2003-2004 season.
Traders drew comparisons with 2002 when civil war broke out, sending cocoa prices to a 17-year high of 1,636 pounds a tonne in October of that year.
However, a second analyst said that although it looked as if the country was sliding into a similar conflict, the involvement of France this time lessened concern.
Traders and analysts were readying for fresh highs, particularly if the crisis continues to prevent exports in coming weeks.
Leading cocoa exporters in Abidjan were closed on Monday, Reuters reported.
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