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Ivory Coast conflict may raise chocolate prices

cocoa Ivory Coast
A young employee harvests beans from a cocoa tree in Amichiakro in a cocoa plantation in Divo in the Ivory Coast on October 25, 2010. SIA KAMBOU/AFP/Getty Images

(CBS/AP) Hundreds have died in the battle over the disputed presidency in the Ivory Coast that is increasingly starting to resemble a civil war.

Yet the three-month-old conflict has not resonated on the world stage like the more recent uprisings in Libya and Egypt. Now that world chocolate prices might be affected by it, that could change.

Shortly after the international community declared Alassane Ouattara the winner of the Nov. 28 presidential election over incumbent Laurent Gbagbo, it became apparent that Gbagbo would not step down. The international community responded by banning the country's lucrative cocoa sector and freezing Gbagbo's access to state accounts, which are held abroad in a central bank serving the region.

The plan was to force him to default on civil servant salaries and cause the military to abandon him, but each passing month Gbagbo has managed to make payroll. Gbagbo first fought back by nationalizing private banks. On Monday, a decree read on the evening news announced that the cocoa and coffee sector had also been nationalized and that only the state of Ivory Coast would now be allowed to purchase or sell coffee and cocoa products on the world market.

Gbagbo's ability to control the lucrative coffee and cocoa trade may prove key to his ability to maintain power. The Ivory Coast produces 40 percent of the world's cocoa, the key ingredient in making chocolate. That is by far the most of any country.

Years of tension in Ivory Coast had already sent bulk cocoa prices to an all-time high of $3,510 a ton in December, 2009, reports the BBC. The reason that international cocoa prices rose to that point is in no small part due to the hesitation of Ivorian farmers to invest in expanding production amid political upheaval.

It takes three years for a cocoa bush to become productive, and it can be an expensive gamble for farmers. With political tensions escalating in the Ivory Coast, and cocoa production already on the decline, Gbagbo's latest move is likely to accelerate the rising coast of cocoa on the world market as farmers there continue to hesitate to invest in more cocoa bushes.

The political situation there is also showing few signs of improvement

Police help loot opposition homes in Ivory Coast
Army guns down female protesters in Ivory Coast

The government set up by Outtara confirmed Monday that rebels allied with their leader had seized control of a nearly 30-mile corridor along the country's border with Liberia following an intense weekend battle.

The seizure of Toulepleu on Sunday afternoon extends the gains made by the rebel army, which earlier had seized another town called Zouan-Hounien. Both towns have historically been controlled by Gbagbo.

At the beginning of the three-month standoff, Ouattara distanced himself from the northern-based New Forces rebels, who fought a 2002-2003 civil war to try to oust Gbagbo. Ouattara argued that he did not want to be seen as having taken the country by force when he had won the election fairly, according to both the country's electoral body and the United Nations which certified his victory.

In recent weeks, however, his administration has acknowledged the role of the rebels - known by their French acronym, FN - who are making inroads including in the commercial capital of Abidjan. A section of the city called PK-18 is now fully under Ouattara's control and checkpoints there are being manned by young men who openly acknowledge being members of the FN force.

Ouattara's defense spokesman Capt. Leon Kouakou Alla said the town of Toulepleu is strategically important because it was from there that Liberian mercenaries were being recruited to fight for Gbagbo. It was considered a difficult area to take because the town's garrison includes a "Stalin's organ" - a Katyusha rocket launcher capable of firing multiple rockets at a time.

"After yesterday's combat, the republican forces loyal to the president of the republic took the town," he said. "The recruitment of mercenaries used to be carried out from Toulepleu from a little place called Pekan-Ouebly ... The importance of this is that now that we have occupied this place we have cut off Gbagbo's rear base."

There was no immediate response from Gbagbo's camp. Saah Nyuma, the deputy director of the Liberia Refugee Repatriation and Resettlement Commission, said he heard the sounds of explosions coming from Ivory Coast. At least one mortar shell fell on the Liberian side of the border during the fighting on Sunday.

Analysts fear Ivory Coast's political crisis following the disputed presidential election will spill over into a civil war that could reach across neighboring countries. During Liberia's civil war, Gbagbo backed the MODEL rebel group against warlord Charles Taylor, and there are persistent reports that Gbagbo has brought Liberian mercenaries to the capital to help him fend off an international force.

Back during the country's civil war, the FN rebels also received help from a Liberian faction - this one allied with Taylor. One ex-Liberian combatant from Taylor's disbanded army told The Associated Press he was now serving as a "field commander" in Ivory Coast for Ouattara's forces.

"What we are doing here is no secret," said the man, who spoke on condition of anonymity for fear of reprisals. "They all want to see Gbagbo give out power to the man elected."

Ouattara has been recognized as the rightful winner of the race by governments around the world, yet has been unable to leave the grounds of an aging resort hotel, where he is boxed in by soldiers loyal to Gbagbo.

The 65-year-old Gbagbo has indicated he will stop at nothing to hang on to power. Nearly 400 people have already been killed, most of them civilians who voted for Ouattara.

Last week, the army opened fire on an all-women's march calling for Gbagbo to step down, killing six. A gruesome video of the killings which was made available to The Associated Press caused a shockwave when it was disseminated. At one point, a badly wounded woman attempts to lift herself up on one arm, only to collapse into a pool of her own blood.

"We were appalled last week when we saw the video," said Assistant Secretary Johnnie Carson, the State Department's top diplomat for Africa during a meeting with reporters in London on Monday.

"This is an attempted seizure of power by the leader who was thrown out at the ballot box," said Carson. "What we are trying to do through political and diplomatic pressure and economic sanctions is prevent a civil war."

Ouattara urged the world to go further and mount an armed intervention to oust Gbagbo. When it became clear there was little stomach for that kind of maneuver, the rebels allied with Ouattara began moving into the commercial capital, especially the Abobo and Anyama districts on the city's northern fringe, both areas that voted in large numbers for Ouattara.

Fierce fighting broke out there late last month as Gbagbo's military attacked Abobo with heavy artillery. There were so many bodies that the morgue could no longer put them all in refrigerated vaults and the AP saw stacks of rotting corpses on the morgue's floor.

A shift occured around the last week of February, when the neighborhood helped by FN rebels as well as by soldiers that had defected from Gbagbo's army began to fight back. An entire swath including all of PK-18 and most of neighboring Anyama are now under Ouattara's sway, with checkpoints manned by rebels and residents loyal to him.

Among the soldiers who quit the army and joined Ouattara inside the fortified Golf Hotel is the government's new military spokesman, Alla, a former captain in Gbagbo's paramilitary police unit.

"I made a Republican choice. I did not choose a person," he told the AP by telephone on Monday. "There was an election. There was a result. I am a soldier in the service of the Republic. And I decided that I needed to respect the rules of democracy."

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