Market News

BY  Bayo Akomolafe

Nigeria is expected to earn $2.4 billion from cocoa export this year from its 500,000 tonnes projection following attacks by brown rot, fungal diseases and poor weather ravaging the beans in West Africa which controls 75 per cent of the global production. It was gathered that the current challenges in Nigeria, Ivory Cost, Ghana and Cameroon had pushed up the price of raw cocoa bean to $4,852 per tonne in the global market.

Top export destinations of Nigerian raw cocoa beans are The Netherlands with a share of 39 per cent; Indonesia, 15 per cent and Malaysia, 14.2 per cent. Findings from International Cocoa Organisation (ICCO) revealed that global cocoa industry is worth $200 billion annually. West Africa, which produces 75 per cent of the world’s cocoa supply, will not make more than $10 billion from the industry this year. It noted that Germany, which does not produce cocoa, earned a whopping $57.3 billion from cocoa products exported to the country from West African countries. Worried by this, the Nigeria Export-Import Bank (NEXIM) has unveiled Cocoa Connect Africa’s digital hub, saying that it was part of efforts to enhance cocoa production in the country. The Managing Director of NEXIM, Abubakar Bello, explained that the platform was seeking to consolidate the activities of stakeholders in the cocoa industry and ecosystem under a single digital platform. Bello emphasised the significance of digital platforms in modern trade at the International Cocoa and Chocolate Forum in Lagos, and stressed the need for stakeholders to access market information and connect efficiently. He said that the digital hub encompassed clusters for various commodities, with dedicated sections for cocoa, cashew, and Shea. According to him, the primary goal is to create a space where stakeholders across the value chain can digitally engage, trade, and share information.

Bello highlighted that the launch was not profit-driven but aimed to boost trade facilitation and set standards for traceability in the cocoa industry. He noted that the digital platform was expected to play a vital role in educating farmers, regulators, and other participants in the cocoa value chain. He said: “It will raise awareness about the latest trends and promote effective regulation within the industry.” Also, the Executive Director of Business Development at NEXIM Bank, Hon. Stella Okotete, said that over N100 billion was provided in the last seven years. She added that NEXIM had established initiatives such as the Small and Medium Exporters Facility (SMEF) to support exporters and enhance their capacities. Okotete also commended young entrepreneurs for positively impacting the cocoa value chain and assured them of the bank’s continued support. In response to the recent surge in cocoa prices, she said NEXIM had opened refinancing windows to offer exporters single-digit interest-rate loans. It would be recalled that in 2023, the International Cocoa Association (ICCO), in its quarterly forecast, placed Nigeria as the fifth largest producer of the beans with 280,000 tonnes in 2023. it explained that Ivory Coast production would reach 2.23 million or 44 per cent; Ghana 750,000 tonnes; Ecuador, 370,000 tonnes; Cameroon, 300,000 tonnes; Indonesia, 200, 000 tonnes and Brazil, 220, 000 tonnes. However, the organisation stressed that there would be 60,000 tonnes global cocoa deficit in the 2022/23 season. According to ICCO, most exporting countries were providing incentives to promote local processing of cocoa beans. It said: “Though cocoa demand in developed economies remains uncertain, processing at origin is on the rise and will likely be the game changer for global grindings.”

Early in the year, exporters were having difficulties to move their cocoa beans to the port because of naira redesign, leading to shortfall in cash for logistics. The President of the Cocoa Association of Nigeria (CAN), Mufutau Abolarinwa, explained that members of the association were constrained to pay for all the services like grading fees, handling charges and freight. He stressed that only 30,000 tonnes were moved to the port because of scarcity of cash. It was learnt that The Netherlands is the major consumer of the country’s cocoa beans as at 2022 with $459.2 million imports between 2021 and 2022. The country purchased $259.5 million worth of the beans in 2021 and $200 million from Nigeria in 2022. According to National Bureau of Statistics (NBS), the country imported N43.9 billion of the bean in the last quarter of 2022 from Nigeria.