The surge in global cocoa prices is expected to drive an increase in Nigeria's non-oil exports
Farmers and traders across the nation anticipate a significant increase in Nigeria's non-oil export earnings for the first quarter. This projection comes as cocoa prices, the country's primary export commodity, have soared to unprecedented levels, surpassing $10,000 per ton for the first time.
Global cocoa prices have skyrocketed, more than doubling since the beginning of 2024, and show no signs of abating. This surge is attributed to the most severe supply deficit in decades, exacerbated by unfavorable weather conditions and outbreaks of pod diseases, particularly affecting major suppliers in West Africa such as Ivory Coast and Ghana.
Mufutau Abolarinwa, the national president of the Cocoa Association of Nigeria (CAN), highlighted that the global surge in cocoa prices presents a significant opportunity for Nigerian growers. This surge is expected to bolster the country's non-oil exports, with cocoa remaining at the forefront as Nigeria's primary agricultural export.
Abolarinwa emphasized, "This surge will enhance our foreign exchange earnings, thus boosting revenue from non-oil exports." He further noted that cocoa farmers are currently experiencing a surge in earnings, positively impacting their livelihoods.
Oba Dokun Thompson, the Oloni Eti-Oni and chairman of the Eti-Oni Development Group, known for producing Gureje IV chocolate bars, echoed this sentiment. He expressed optimism that the sharp rise in cocoa prices would contribute to an increased inflow of foreign exchange into the country.
He highlighted that the commodity not only holds a prominent position as a cash crop in Nigeria but also ranks as the most exported agricultural product in the country, drawing from data sourced from Nigeria’s foreign trade in consumer goods report.
According to the latest data on global production from the International Cocoa Organisation, Nigeria currently stands as the world’s fourth-largest producer of cocoa, yielding 280,000 metric tonnes in the 2022–2023 season. This places Nigeria behind Ivory Coast, Indonesia, and Ghana. Furthermore, Nigeria ranks as the third-largest exporter of cocoa, following Ivory Coast and Ghana.
In 2023, Africa’s most populous nation exported cocoa beans worth a total of N356.16 billion, marking an 18.44 percent increase compared to the N300.71 billion recorded in 2022.
The export of the commodity constitutes 28.72 percent of the total agricultural exports, amounting to 1.24 trillion in 2023. Additionally, it represents 5.6 percent of non-oil exports for the same period.
At the local level, cocoa bean prices are also on the rise due to a weaker naira. Currently, a metric ton sells for N12 million at the Matori cocoa warehouse in Lagos, compared to an average of N8 million per ton in February. This surge reflects a significant 50 percent increase in prices within just one month.
Adeola Adegoke, the national president of the Cocoa Farmers Association of Nigeria, anticipates that the country's production output for the 2023-2024 mid-crop season will remain consistent with that of the previous season, despite the ongoing global price rally.
"We do not foresee an increase in output for the 2023-2024 mid-crop season, which typically contributes 30 percent to the total production," he remarked.
Adegoke further emphasized that Nigeria is poised to witness a significant surge in its non-oil export earnings in 2024, particularly during the main crop season, attributed to the rally in cocoa prices.
"However, we are observing a notable increase in farmers' attention to their cocoa trees due to the recent surge in prices, and this impact will be more noticeable during the main-crop season," he added.
Nigeria observes two cocoa harvest seasons: the smaller mid-crop, which spans from April to June, and the main crop, which occurs from October to December.
The mid-crop contributes approximately 30 percent to Nigeria's cocoa output, with the main crop constituting the remaining percentage.
However, despite bringing relief and prosperity to farmers, the surge in cocoa prices has posed challenges for local craft chocolate makers in the country, leading to struggles for many and some businesses being forced to shut down entirely.
"It's more profitable to sell cocoa beans now than to process them into chocolate," remarked Lawrence Afere, the founder of Springboard Farmers' Co-operative of Nigeria and producer of Tiwa Chocolate. "How can a chocolate craft maker survive when purchasing a metric ton at N12 million, inclusive of all other production expenses, and still turn a profit?"
The International Cocoa Organisation has projected a global supply deficit of 374,000 metric tons for the 2023-2024 season, marking a significant increase of 405 percent from the 74,000 deficit recorded in the previous 2022-2023 season.
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