The sharp drop in the price of cocoa beans in West Africa has affected government revenue and exporters’ earnings in Nigeria since the beginning of this year, New Telegraph has learnt. The country is experiencing this challenge at a time the retail market for chocolate candy is valued at $143 billion in 2017.
The price of the commodity fell within the last seven months from $2,019 per metric ton to $1,457 per metric ton in May 2017.It was gathered that the price of the commodity fell by 49.91 per cent in Nigeria due to poor quality. Already, exporters of cocoa beans have stopped shipping the commodity through the Port and Terminal Multi-service Limited, Tincan Island Port, since last April, as buyers were offering lower prices for cocoa beans.
A member of the Cocoa Association of Nigeria (CAN), Mr. Johnbull Ewerami, explained that buyers were demanding higher quality cocoa beans than the ones being sold in the market. He said exporters now prefer mid-crop cocoa with bean count of a minimum of 250 grams per 300 beans or higher.
He noted that good quality cocoa had a bean count of 300 grams per 300 beans in Nigeria. Apart from Nigeria, it was also gathered that poor pricing has affected Ghana by nearly $1 billion in export earnings due to a steep decline in cocoa prices. Also, the price has forced Ivory Coast to slash its 2017 budget. Trouble started last December when the price of the commodity tumbled by 42.38 per cent due to excess supplies of cocoa bean in some warehouses in Nigeria, Ghana and Ivory Coast. The International Cocoa Organisation (ICC) said that the surplus beans had reached 200,000 metric tons in the period.
It added that collective decisions would be taken to reduce the impact of the current pricing crisis in Nigeria and other African countries. Last year, ICC had forecast that major West African cocoa producers, Nigeria, Ghana and Ivory Coast would record a deficit of 147,000 metric tons valued at N128.73 billion ($429,123, 670) from cocoa production in the first quarter of the year because of the effect of the harmatan, which had plundered cocoa flowers and buds off trees before they grew into pods.
It also predicted that demand would outstrip supply in 2016, as global industry deficit forecast was estimated at 308,000 from its earlier forecast of 113,000 tons in its previous report last February. However, the forecast failed because of the favourable weather witnessed in the West Africa region in the second and third quarters of the year that led to surplus.
The organisation also noted that the Nigerian farmers would experience poor harvest due to dry weather, fungal diseases and aged cocoa trees. It was also estimated that 40 per cent of the country’s trees were unproductive because they have passed their peak production age of 10 to 20 years.