Nigeria’s cocoa exports jump 304% on demand, naira

Nigeria’s cocoa exports rose by 304 percent in the first quarter (Q1) of 2024 due to higher demand and naira depreciation, according to data from the National Bureau of Statistics (NBS).

The country’s cocoa exports, which accounted for 42.4 percent of the N1.04 trillion agricultural exports for the period, surged to N438.7 billion in the first quarter of 2024 from N108.6 billion in the corresponding period of 2023.

Cocoa prices surged by over 567 percent in the Q1 of 2024 and were sold above N12 million per metric ton for the first time in the country, as the worst deficit supply in decades from Ivory Coast and Ghana, two major commodity suppliers, disrupted global supply.

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The price rally caused Nigerian farmers to begin reviving old cocoa plantations and plant more high-yielding seedlings to replace old and unproductive trees while expanding their growing areas.

“You can imagine the efforts and the returns that are coming from the export of cocoa,” Adeola Adegoke, national president of the Cocoa Farmers Association of Nigeria, said in an interview with BusinessDay.

“It shows that if governments and all of us at the private sector can remain focused in terms of increasing and decentralising the production of cocoa, Nigeria could be producing about 500,000 to 600,000 metric tons,” he noted.

According to him, what the country has been able to generate from the cocoa exports in the first quarter reflects the huge potential in the production of the commodity, noting that with adequate attention and investments, the potential will be fully leveraged to boost government revenue.

Despite the export value of cocoa surging to high levels, Mufutua Abolarinwa, national president of the Cocoa Association of Nigeria (CAN), said production levels have remained stagnant.

Abolorinwa said the increase in revenue from exports did not reflect on the production value.

“The reason for this high revenue from cocoa export is because of the dollar exchange rate,” he noted. “Production did not necessarily increase from its current 280,000 metric tons.”

The country is currently the world’s fourth largest producer of cocoa with 280,000 metric tonnes in the 2022–2023 season, according to the International Cocoa Organisation’s (ICCO) latest data on global production, after Ivory Coast, Indonesia, and Ghana, and the third largest exporter, after Ivory Coast and Ghana.

Cocoa prices soared to unprecedented levels during the first six months of the year, reaching historic highs of $12,000 per tonne in April 2024, according to data from ICCO.

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Locally, prices of cocoa beans are also surging on weaker naira. Farmers have attested to making profits from the price rally, many of whom went back to farming to take advantage of the current market boom.

Sayina Riman, a cocoa farmer in Ikom, Cross River State, told BusinessDay that he has paid more attention to his cocoa plantation this year than any other year.

“I paid more attention to my cocoa farm this year than before. I pruned the undergrowth and applied liquid fertiliser, which is something I have never done,” Riman said.

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In terms of profit, he said his revenue increased by 200 percent but a major proportion went to the payment of labour.

Oba Dokun Thompson, the Oloni Eti-Oni, chairman of Eti-Oni Development Group and producer of Gureje IV chocolate bars, called for an increase in value addition in the cocoa beyond the monetary gains.

He noted that the present price rally is not sustainable as more regions are accelerating their cocoa production capacity which, according to him, could lead to a price drop in the next two years.

Thompson however urged farmers to maintain the momentum the country has seen in 2024, noting that the cocoa market needs to be seen as a value-added sector beyond the price rally.

“Government needs to support innovation and creative ideas, new ideas and new ways to ensure that there is a clear understanding of the cocoa industry,” he said.

The chocolate manufacturer added that the government must support the cocoa industry for Nigeria to have a well-developed cocoa culture in West Africa and Africa as a continent.