Nigeria’s Cocoa Exports To Boost Non-oil Revenues
Nigeria’s cocoa exports appear set to contribute more to the country’s non-oil revenues as stability in the global market continued to support the growth of its exports.
The International Cocoa Organisation(ICCO) revised forecasts for the 2021-2022 period noted that despite rising input costs, including high energy costs alongside supply chain issues and increase in interest rates, among others, cocoa demand has thus far remained steady during the season and the reduction seen in global supply has to this point been less disruptive to the cocoa market.
So far, analysts noted that the cocoa market has moved from a deficit as production grows in Africa. Similarly, prices are seen rising slowing.
In the first quarter of this year, according to the foreign trade report, released by the National Bureau of Statistics (NBS), Nigeria exported superior quality cocoa beans valued at N72.59 billion. Already, the Federal Government, in partnership with the Cocoa Farmers Association of Nigeria, has commenced moves to attract extra $400 on the cost of every tonne of cocoa exported from Nigeria. It was learnt that Nigeria exports about 340,000 tonnes of cocoa yearly, meaning that the country is to earn an additional $136 million outside the actual cost of the commodity once it perfects the process required to achieve this.
At the moment, Nigeria’s cocoa production is estimated at 340,000 tonnes. Nevertheless, the Federal Government had declared that it is committed to increasing Nigeria’s cocoa production from 340,000 tonnes to 500,000 tonnes yearly by 2024.
Speaking at the inauguration of the National Cocoa Management Committee in Abuja, Minister of Agriculture and Rural Development, Abubakar Mahmood, said officials of his ministry recently visited Ghana to study the implementation of Living Income Differential with respect to cocoa export. He explained that Ghana and Cote d’Ivoire introduced the Living Income Differential as a premium on their cocoa and as tool to complement the prices of cocoa in the international market.
In West Africa, Ghana and Ivory Coast account for two-thirds of global cocoa production. They joined forces last year to try to get more from the chocolate industry, in a model resembling that of the Organisation of Petroleum Exporting Countries (OPEC) cartel. Abidjan and Accra obtained a premium of $400 per tonne of cocoa from their buyers, known as the Decent Income Differential, and applied it to the 2020-21 seasons.
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Between 2016 and 2019, according to Statista, an international research firm, the monthly price of cocoa worldwide peaked in mid-2016 at about $3,122 per metric tonne and has fluctuated between about $1,900 dollars and $2,700 per metric tonne.
But National President, Federation of Agricultural Commodity Association of Nigeria (FACAN), Dr Victor Iyama, said the cocoa prices had never been stable as they were determined by the major buying groups.
For this reason, he noted that he and other cocoa producers were preparing against any upheaval in the cocoa market.
He explained that the outlook of global cocoa production had remained uncertain as high farm inputs prices and logistics disruptions still hamper productivity in major producing areas.
According to him, COVID-19 pandemic had driven an increased demand for healthy, immunity-boosting, and ecologically sound food and beverage products.
He believes boosting the income of cocoa farmers while ensuring cocoa is grown sustainably is key to sustaining the sector.
