Cocoa producers may have been pleased as the produce price reached a record high of $9,010.59 per tonne at the New York Commodities Exchange.
Over the last year, the price of a tonne of cocoa has tripled, rising from $2,000 to more than $6,000 in ordinary markets.
Nigerian cocoa growers and exporters are benefiting greatly as global cocoa prices reach new highs, thanks to the strong naira devaluation, which has resulted in a significant rise in income from the sale of the beans.
Sotonye Anga, Agribusiness & Youth Empowerment Coordinator at the Community of Agricultural Stakeholders of Nigeria (CASON), stated that it was the best time in the industry because cocoa prices had reached unprecedented highs, with experts expecting no decreasing trend throughout the year.
The spiraling price increase follows poor weather circumstances that have had a considerable influence on cocoa production in Nigeria, Ghana, and the Ivory Coast.
Anga was pleased to see that the short-lived price increase was affecting the chocolate sector, causing chocolate makers to alter their processes to remain profitable.
Chocolate manufacturers are prepared for a decrease in demand as core ingredient costs rise.
Henley Bridge, a supplier of ingredients, reports that cocoa prices increased by 15-20% in the first half of the year and are projected to continue throughout the year.
Anga said that industry needed higher prices to entice farmers to invest in the business. Cocoa is a vital ingredient in chocolate production. Currently, the farm-gate price is between N6.5 million and N7 million.
Encouraged by this, some farmers are harvesting beans from neighboring West African countries to sell to exporters.
According to Anga, the naira devaluation and rise in world prices caused by a deficit from top producers are tremendously benefiting cocoa farmers. Nigeria, the world’s fourth-largest cocoa producer and supplier, had its worldwide supply value fall by 3.4% to 280,000 metric tons in the 2022-2023 season, according to the International Cocoa Organisation’s most recent global production data (ICCO).
Cocoa futures prices reached an all-time high of $5,874 per metric tonne in 2018 due to poor crop yields in West Africa, which accounts for three-quarters of global production.
In Ondo State, graded cocoa certified fit for export sold for N 2.5 million per metric tonne, while cocoa in Cross River State, the second-largest cocoa producer, sold for between N2.4 million and N2.5 million per tonne.
While cocoa is selling well in London and New York, Dr Victor Iyama, President of the Federation of Agriculture Associations of Nigeria (FACAN), says local cocoa farmers are not happy because their revenues have not increased. He stated that growers receive approximately 6% of the price that consumers in rich countries pay for chocolate.
According to Iyama, chocolate producers’ agents pay farmers a predetermined amount during the season. He claimed that the prices supplied by chocolate manufacturers’ intermediaries hinder their capacity to profit when prices rise. While international chocolate firms’ revenues have soared, he claims cocoa farmers only earn a portion of the global market price for beans. According to him, the large chocolate manufacturing corporations are the ones making significant profits. He stated that it was past time for cocoa-producing countries to set their own export prices.
To that aim, he stated that industry players are mobilizing to see the establishment of Africa Cocoa Exchange, which will transform cocoa selling in Africa. According to him, the exchange will contribute positively to the development of a sustainable global cocoa economy.
The global cocoa industry is worth $200 billion each year, while West Africa, which produces 75 percent of the world’s cocoa, earns less than $10 billion. Abba Bello, managing director of the Nigerian Export-Import Bank (NEXIM), was represented by Tayo Omidiji, general manager/head of strategy and corporate communications, NEXIM Bank, at a press briefing to announce the International Cocoa and Chocolate Forum (ICCF) 2024, which was held in Abuja in January this year. Bello emphasized the need for all stakeholders, including policymakers, researchers, organized private sector, and fi “It is worth noting that the cocoa industry (including beans, cake, chocolate, and so on) is worth $200 billion per year, with the entire West African producing region (made up of Cote d’Ivoire, Ghana, Cameroon, and Nigeria), which accounts for roughly 70-75% of global output, earning only $10 billion.
