New Telegraph

Cocoa: Nigerian Merchants Target $2.7bn From 70% Price Surge

As global cocoa bean production falls by 10.9 per cent, Nigeria exporters are expected to realise N3.2 trillion ($2.7 billion) from 270,000 tonnes output in 2024 as price hits $10,030/ tonne in April 2024. It was learnt that buyers in Europe and America are currently experiencing between 650,000 tonnes and 700,000 tonnes shortfall as at April 2024, following a revised estimated production of 4.99 million tonnes in the 2022/2023 season. However, price of cocoa at farm gate in Nigeria is N8 million per tonne when compared to N1.8 million per tonne in December 2023.

According to data from an industry group, the International Cocoa Organisation (ICCO), disease, spread by insect vector mealybugs, have caused significant production losses where cocoa plantations were predominantly owned by smallholder farmers in Côte d’Ivoire, Ghana, Nigeria and Cameroon, who struggle to maintain their trees due to limited financial resources as price of the beans rose by 70 per cent from $3,000 in April 2023 to $10,030 in April 2024.

The organisation explained that In February 2024, Ivory Coast’s cocoa bean output to fall by 19.6 per cent to 1.8 million tonnes in the 2023/2024 season from 2.24 million tonnes in the previous season, while Ghana was projected to produce 580,000 tonnes of cocoa beans in 2023/2024, an 11.31 per cent drop from 654,000 tons in the 2022/2023 season. Also, Nigeria which projected to produce 300,000 tonnes is projected to fall by 10 per cent to 270,000 tonnes.

Top export destinations of Nigerian raw cocoa beans are Netherlands with a share of 39 per cent; Indonesia, 15.5 percent and Malaysia, 14.2 per cent. Findings from ICCO revealed that global cocoa industry was worth $200 billion annually, noting that West Africa, which produces 75 per cent of the world’s cocoa supply. It noted that Germany, which did not produce cocoa, earned a whopping $57.3 billion from cocoa products exported to the country from West African countries.

Meanwhile, the National President, Cocoa Farmers Association of Nigeria (CFAN), Comrade Adeola Adegoke, had said that Nigeria needs firm control of its cocoa economy in order to increase the production and productivity of smallholder cocoa farmers’ farms through the provisions of subsidised farm inputs, credit facility, capacity building etc thereby improving their livelihoods.

Adegoke stressed that as far as the recent cocoa prices favoured farmers, the future of the Nigerian cocoa sector would further be brightened with the intervention of the full exercise of the regulatory powers of the industry vested in the hands of National Cocoa Management Committee (NCMC) dominated by the private stakeholders.

According to him, the country must start to regulate and promote the Nigerian cocoa economy through the NCMC, where more investment into the sector would be guaranteed if the committee could achieve stable regulatory framework that controls quality, smuggling, pesticides control, extension management, child labour eradication, deforestation control and National Cocoa Plan implementation among others.

He noted: “The NCMC must not get involved in buying and selling of cocoa beans except cocoa beans stabilisation support funding in future when necessary especially when cocoa price nosedived downward beyond cocoa farmers economic capacity as being done in other developed countries on other commodities.

“Nigeria has better opportunities to surpass Ivory Coast and Ghana considering the downward sliding of their cocoa production due to pest and disease, climate change, smuggling, miners activities, land degradation, unfavourable cocoa economy governance (government involvement in buying and selling of cocoa beans), poor remuneration of their smallholder cocoa farmers etc.”

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