An exchange traded note based on cocoa futures has risen this week on speculation that a civil war in Ivory Coast will continue to disrupt shipments of the commodity, even after the capture of former president Laurent Gbagbo.
Gbagbo was handed over to forces loyal to president-elect Alassane Ouattara. The European Union on April 8 lifted sanctions on the ports of Abidjan and San Pedro after Ouattara called for their removal in an attempt to revive the economy. Ivory Coast is the world’s largest cocoa producer.
“People want clarity on how and when exports will begin,” said Hector Galvan, a senior trading adviser at RJO Futures in Chicago. “People want to be sure that there will be no more disruptions.”
“Whenever the market is more optimistic about a solution, then the prices will come down quite considerably because supply is really good,” said Michaela Kuhl, an analyst at Commerzbank AG.
The iPath DJ-UBS Cocoa Subindex ETN (NYSEArca: NIB) rose on Tuesday.
Gregory A. Clay contributed to this article.