High cocoa prices drive Nigerian farmers to restore neglected plantations, FACAN

NIGERIA- According to Dr. Victor Iyama, President of the Federation of Agricultural Commodity Association of Nigeria (FACAN), farmers in rural Nigeria are regaining interest in cocoa, with many rejuvenating neglected plantations. 

International cocoa prices have reached all-time highs, reigniting interest among farmers. According to Iyama, many farmers in rural Nigeria are returning to cocoa farms previously covered by bushes.  

The price increase is primarily driven by extreme weather, illegal smuggling, and disease, which have caused a significant decline in cocoa prices in Ghana and Ivory Coast, the two largest cocoa producers in the world. 

Cocoa yields have declined by 50% in Ghana and 29% in Ivory Coast, respectively, within the past year. The International Cocoa Organization (ICCO) expects global production to fall by 11% in the 2023/2024 season, a demand deficit of around 493,000 tons.  

The supply disruptions and consequential shortages among the two largest cocoa producers in the world have created a resurgence in other cocoa-producing countries, especially in West Africa. 

According to the National Bureau of Statistics (NBS), Nigeria’s cocoa exports increased by 279% in Q1 2024, from N107.59 billion (US$72.4 million) reported in the same quarter last year to N408.66 billion (US$273.8 million) in the reported quarter.  

In early June, Johnvents Industries Limited and the World Bank’s International Finance Corporation (IFC) announced a US$23.3 million investment package to expand the company’s cocoa production in Nigeria, enhancing the country’s cocoa production.  

The supply challenges and surge in cocoa demand appeared to have overshadowed the continued depreciation of the Naira in Q1 2024. According to the NBS, the USD value of the country’s cocoa exports increased by 65.3% between the last quarter of 2023 and Q1 2024. 

Nigeria is not the only West African country benefiting from the current supply disruptions in the cocoa market. On June 4, French entrepreneur Olivier Bordais announced plans to build a 3,000-square-meter chocolate processing facility in Cameroon at a cost of US$1.6 million. 

Analysts predict that more chocolate processing companies will invest in alternative cocoa producing countries in West Africa to supplement the current shortages in cocoa production.