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Thursday, 10 October, 2002, 12:52 GMT 13:52 UK
Cocoa prices rise on Ivory Coast fighting
Rebel soldier with machine gun on pick-up truck
Rebel soldiers are advancing to the main cocoa region
Rebel advances on the main cocoa producing region of Ivory Coast, the world's leading exporter, has pushed prices to near 17-year highs.

The front line between government and opposition forces has moved to within 30km (20 miles) of the key trading town of Daloa.

In London, the main market for cocoa, futures contracts touched 1,600 ($2,500) a tonne, creeping close to a 17-year high.

On the New York market, prices rose 2.25% to $2,317 per metric tonne, the highest since September 1985.

The fighting has already disrupted trade and buyers are turning to other growers in the region.

The International Cocoa Organisation has also delayed plans to relocate its headquarters to the capital Abidjan from London.

Workers flee

Cocoa prices have risen 12% since the fighting began in Ivory Coast, which produces about 40% of global supply, on 19 September.

The world's largest cocoa-trading company, ED&F Man Cocoa, has predicted production will be down 4.1% this year, heightening fears demand will outstrip supply for the third year running.

Hundreds of homes have been destroyed in the West African nation and thousands of Burkina Faso nationals, who form the backbone of the Ivory Coast cocoa workforce, have fled plantations.

Ivory Coast's president Laurent Gbagbo has accused Burkina Faso of supporting the rebels.

Neighbours benefit

Cocoa farmers in Ghana's important Ashanti growing region are already anticipating a bumper year.

The Ghana Cocoa Board (Cocobod), has already said it would increase farm gate prices to 6.2m cedis ($763) per tonne of beans when it opens sales on Friday.

Ghana, the world's third largest cocoa producer, is the only major grower that still fixes prices.

Cameroon's cocoa farmers have reportedly doubled their earnings after the sharp rise in world prices over the last three weeks.

Cameroon produces only about a tenth of Ivory Coast's one million tonne output.

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 ON THIS STORY
Ann Prendergast, cocoa analyst, Refco in New York
"Prices have surged and they've gone straight up since about June 2000"

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