Liffe May cocoa ended 15 pounds higher at 2,176 pounds ($3,436) a tonne on Tuesday after rising to a six-month peak of 2,269 pounds on Monday. Prices first soared after Ivory Coast's Alassane Outtara declared a month-long export ban, and six exporters said they had heeded his call, but it remains unclear how the ban will affect global supply because the main cocoa crop has already been exported.
Liffe March white sugar closes $14.70 lower at $781.50 per tonne, weighed down by the sharpest drop in commodities in three weeks. But prices remain in a tight range, held up by uncertainty over India's sugar exports. Liffe March robusta coffee ended down $29 at $2,094 a tonne, caught up in the commodity slump, as markets fret over possible monetary tightening in key commodity consumer Asia and a sharp contraction in Britain's economy.
Six major exporters of cocoa from Ivory Coast - including Cargill, the top exporter of Ivorian beans - are heeding Ouattara's call for a ban, a move designed to cut funds to incumbent leader Laurent Gbagbo. "As expected, the big players were going to go along with the ban," said Kona Haque, analyst with Macquarie Bank in London. "They can afford to do it because we're done with the main cocoa crop anyway."
The Ivorian cocoa sector body said 700,000 tonnes of cocoa are already exported and another 300,000 registered, and therefore ready for export. Some dealers said the rally that had boosted cocoa prices by as much as 20 percent over the past two weeks was over-extended, especially as most of the main Ivorian crop is already exported.
But Haque said cocoa prices were still likely to rise as the effects of the ban are felt over the next month. "If you have the world's top grower out of commission for a month, it doesn't matter how well covered grinders are... The risk is still on the upside," she said, adding some cocoa was still likely to get out through smuggling, despite the ban.
Switzerland's Barry Callebaut, the world's largest chocolate maker, said on Tuesday it was seeking more clarification on the cocoa export ban. Mars Inc said its chocolate manufacturing will not be impacted by the cocoa export ban in the short term, and neither will European chocolate and confectionery makers, the industry group Caobisco said on Tuesday.