Instant View: Gbagbo set to surrender power in Ivory Coast

LONDON (Reuters) – Ivory Coast’s Laurent Gbagbo has surrendered and asked for United Nations protection, an internal U.N. document seen by Reuters said on Tuesday.

Gbagbo was negotiating his departure following a fierce assault by forces loyal to his presidential rival Alassane Ouattara backed by U.N. and French helicopter air strikes.

Below are the views of analysts watching events in Ivory Coast, the world’s top cocoa producer.

RICHARD NORTON, LECTURER, U.S. NAVAL WAR COLLEGE

President Alassane (Ouattara) will have to secure the country. That means reining in his supporters, putting a brake on official looting and excess and dealing with former supporters of Gbagbo. The French and U.N. forces would be helpful in that regard.

I’d like to see a gentle yet firm approach — broad amnesty for junior officers and troops, with relatively few trials, conducted to legal standards. At the same time he’ll have to encourage a return to normalcy, getting ports open, commerce flowing. After that he’ll simply have to prove he and his government can overcome the failures and challenges that have beset almost every other African ruling party.

SEBASTIAN SPIO-GARBRAH, MANAGING DIRECTOR, DAMINA ADVISORS

“Even if (Gbagbo surrenders), unless it is public and he openly calls for his faction to give up the fight, we do not envisage the renewed civil war ended.

“We have maintained since December that the conflict in Cote d’Ivoire is not simply one between two presidential candidates, but between two entrenched ethno-political factions which won’t be ended simply because Gbagbo gives up.”

HANNAH KOEP, IVORY COAST ANALYST, CONTROL RISKS

“In the short term, I think it will be very messy. Even if Gbagbo goes, his supporters are still very heavily armed and they will be very frustrated. The security situation in Abidjan is likely to be very unpredictable for some time to come. Beyond that, the challenges are monumental.

“The country was deeply divided even before the election and violence.”

STEVEN HAWS, COMMODITIES RISK ANALYSIS

“Ouattara will push to get the cocoa out and collect the taxes from it.

“I would not be surprised that there are airplanes in Europe loading at the moment with fumigation supplies, people to reopen the warehouses and restart the factories, and people to reopen the banks.

“The long-term prospects for Ivory Coast cocoa are bleak, not only because of the civil conflict, but also because of cocoa’s diseases, because of replanting to rubber, and because of the exodus of people.

“The events of the last month have made the outlook for cocoa worse.”

MANDY KIRBY, POLITICAL RISK ANALYST, MAPLECROFT

“It’s going to be a very uncertain situation for quite some time. In the next three months or so, I think there will need to be a real focus on building the foundations of the rule of law.

“There are a number of obstacles to developing a truly stable business environment. But Ivory Coast is a very attractive investment destination because of its natural resources and it will still be appealing for the right kind of investor.”

MARTIN ROBERTS, ANALYST, IHS GLOBAL INSIGHT

“There’s going to be a lot of international determination that Gbagbo is not simply allowed to walk away. Ouattara has always said his priority will be to put the country back together as quickly as possible.

“The cocoa is already at the port in San Pedro and also Abidjan so it should be possible to get exports going pretty quickly.

“If you look at the way in which cocoa prices have fallen and the bond has rallied, you can see there is a market expectation things could get back to normal relatively quickly. (But) Gbagbo has probably tried to leave things in as much of a mess… as he can.”

JUDY GANES-CHASE, J. GANES CONSULTING IN NEW YORK

“Immediately it’s bearish (for cocoa prices) but the fact is the market’s come down so hard already in anticipation of this, I wonder if it’s ‘sell the rumor, buy the fact’. We’ve fallen so high from the highs already.

“We’ve come down hard, we’ve got the surplus. Things can move forward in the Ivory Coast, hopefully, but it’s going to take time. There’s not going to be an immediate response. People have to come back, feel comfortable, start tending to their farms.

“I imagine it would happen fairly quickly, that things (bean exports) would start to move.

“You have this pile-up of supplies, Ghana has been shipping aggressively. Their purchases are super high this year. It’s going to create even more of a burden short-term to the market.

“We’ve come off already so much that any extreme reaction here is probably going to end up being a buying opportunity just because the market’s going to over-do it.”

KONA HAQUE, COMMODITY STRATEGIST, MACQUARIE BANK

“We need to see on what negotiated terms Gbagbo leaves. He will negotiate an exit. The reaction of his supporters will depend on that negotiation. If people are not happy with the terms, there could be more unrest.

She expected cocoa to resume flowing out of Ivory Coast in a few weeks, and said stockpiles of around 500,000 tons of cocoa in the country had proven resilient to rotting.

“Because they have had good weather, it’s not as moldy as people had expected.”

She expected cocoa futures prices to fall further as export flows resumed, with ICE second-month cocoa futures potentially slipping to $2,700 per ton.

KEITH FLURY, COMMODITY ANALYST, RABOBANK

“The cocoa market had anticipated last week that Gbagbo was on the way out, and this is why the specs (speculators) had got out of their long positions.

“If the EU lifts sanctions quickly, the U.S. will be behind them and there will be a return to normalization of trade. There will probably be a chaotic period after Gbagbo’s departure.”

EUROPE-BASED COMMODITY ANALYST AT INVESTMENT FUND

“Once the fighting has stopped, within 10 or 15 days you’ll probably get cocoa coming out, vessels are being lined up. San Pedro presumably could start sooner because they ought to be making the preparations now.

“You’d have to clear it with the Ouattara government, clear it with EU that you’re not falling foul of the EU embargo. The biggest issue is the banking system. To get cocoa moving again from the bush and to encourage farmers to harvest it you need the banking system up and running.

“The peak of the mid crop harvest is normally in May so we’ve got a month before we have to really start worrying about that. By the beginning of May, there’s no reason why we shouldn’t have a commercial system up and running, farmers being paid, and cocoa coming out.”

NICK GENTILE, HEAD OF TRADING OPERATIONS, ATLANTIC CAPITAL

ADVISORS IN JERSEY CITY, NEW JERSEY

“I don’t know how much more of an affect it will have on the market. The futures prices have dropped significantly since this whole thing started. I think that the commercials are buying paper at these prices and they’ll continue to be scale-down buyers in the market.

“Exports will resume out of the Ivory Coast, which will have a bit more of a short-term bearish effect on the market.

“At some point this could be a very good buying opportunity because of all that’s been going on in the Ivory Coast. I don’t think farmers have been taking care of their crops which will give us possibly deficits down the road for the next couple of crops, until there is peace on the horizon in the Ivory Coast.

“We don’t know how long it will be until things are in order.

“It doesn’t necessarily mean that the people who have supported him will just back down so there’s a lot of unsettled business that we have to see finish out over the next couple of months.

“I would not take a bearish stance in the market at this level and go short because I think your downside potential is not as great as your upside potential at this level.”

(Reporting by Peter Apps, David Brough, Sarah McFarlane in London; Richard Valdmanis in Dakar; Marcy Nicholson in New York)

Instant View: Gbagbo set to surrender power in Ivory Coast