* If Gbagbo falls quickly, prices could fall further - trade
* Gbagbo departure would clear way for ample mid, main crops
* ICE cocoa could fall as low as $2,600 - Rabobank analyst
By David Brough and Jonathan Saul
LONDON, April 1 (Reuters) - Cocoa futures, which hit a 34-year peak last month, are likely to fall to levels seen before Ivory Coast's election in November if forces loyal to claimant Alassane Ouattara defeat presidential incumbent Laurent Gbagbo.
But the lifting of EU trade sanctions and a resumption of shipments will take time as the new government seeks to win over port officials and shippers to restart operations, potentially limiting price declines.
ICE cocoa futures slid to a 2-1/2-month low this week, falling around 10 percent as breakthroughs in the fighting by forces loyal to Ouattara, who won a Nov. 28 poll according to U.N.-certified results, raised prospects that exports could be freed.
Cocoa trade is now at a standstill in Ivory Coast, which accounts for more than a third of the world's supply.
Analysts said investors who piled into long positions would liquidate them if it seemed Gbagbo would lose power.
Keith Flury, a soft commodities analyst with Rabobank, said ICE cocoa futures could fall as low as $2,600 per tonne if Gbagbo fell, but a long-term lack of investment in plantations in Ivory Coast was likely to set a floor to prices.
"The best case scenario if Ouattara were installed would be that the Ivorian mid-crop would be harvested and the main crop (from October) would arrive on the market," Flury said.
"That would push prices lower, to levels not seen since before the election."
Favourable weather has aided development of the mid-crop. which is due to be harvested this month.
ICE second-month cocoa, which was around $2,800 per tonne before the bitterly disputed Ivorian elections, on Friday was at $2,955, down $11 or 0.4 percent as fierce fighting spread across Abidjan.
Gary Mead, VM Group analyst and editor of Worldcrops.com, said cocoa futures could fall further if the speed of change were high in Ivory Coast.
"If the speed of change is not quick, we could see it (price) staying relatively high," he added.
EU SANCTIONS
Even if Gbagbo loses power soon, EU sanctions that have crippled trade in Ivory Coast could linger.
The EU is the leading market for Ivorian cocoa. Annual Ivorian imports into the EU, mainly cocoa, typically amount to around 3 billion euros ($4.2 billion) by value.
"If the pro-Ouattara forces are able to maintain control, there may well be an argument for the sanctions to be revised to allow exports, but it will not happen overnight," said Michelle Linderman, a partner with law firm Ince & Co.
The capture by pro-Ouattara forces of San Pedro, which ships half of the country's production, could kick-start the flow of beans that dried up in January due to sanctions.
"In terms of legal constraints, the cocoa can move, but it may take time. The problem for Ouattara is going to be that the people in the south have overwhelmingly supported Gbagbo," said J. Peter Pham, Africa director with the Atlantic Council, a U.S. think-tank.
"Getting them and the people who are capable of making the infrastructure run, the civil servants and others to cooperate -- that is going to be a task."
Mead said it would also take time to assess the condition of the cocoa stored in Ivory Coast before it could be shipped.
One short-term risk is that beans now sitting in Ivorian warehouses could rot, also propping up prices.
Ship operators said even if sanctions were modified or lifted, it would take time before shipments would resume smoothly. Banks would need to be notified, letters of credit would need to be opened, and any other counterparties would have to be involved again.
"The trade and shipping are pretty hard hit by these measures," said Herman de Meester, deputy secretary general with the European Community Shipowners' Associations, representing ship owners in the EU bloc and Norway.
(Editing by Jane Baird)