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Tag: COCOA

  • Cocoa exporters threaten to relocate business from Abia

    Cocoa exporters threaten to relocate business from Abia

    The leadership and members of the Abia State Chapter of the Cocoa Association of Nigeria (CAN) have threatened to relocate their businesses from the state to neighbouring states.

    Members of the association who spoke to journalists in Umuahia, the state capital, called on the governor of the state, Dr. Alex Otti to disband the Cocoa Monitoring Team that he recently set up.

    The Cocoa Monitoring Team was accused of extorting its members, which the group claimed was negatively affecting their businesses in the state.

    The group in a statement signed by its Chairman, Mr. Johnson Chidi-Uche, also urged the state government to set up a panel of inquiry to probe and investigate the activities of members of the monitoring team whom they accused of sabotaging the activities of the state government to create a more conducive atmosphere for businesses to thrive.

    CAN while praying the state government to compel some members of the monitoring team to include Mrs. Sarah Uzochukwu (Secretary), Mr. Enoch Eke Kalu (Chairman), and Chibunna Osondu Nkwocha whose accounts the team allegedly collected over N1.8 million from their members.

    According to the group, trouble started when the members of the monitoring team came up with some alien guidelines that mandated cocoa merchants to obtain approval from the team before loading their products.

    He revealed that the new guidelines reportedly masterminded by Uzochukwu, were introduced during a meeting of the monitoring team on October 30, adding that CAN and other relevant stakeholders in the Cocoa business in the state were not invited to the meeting.

    Chidi-Uche, pointed out that in a bid to enforce the obnoxious guidelines even after CAN asked it to be reviewed, the monitoring team resorted to using security agencies to extort, intimate, and embarrass cocoa merchants in the state.

    Read Also: Odu’a Investment renovates Cocoa House 59 years after construction

    He warned that if the state government refused to call the said team to order urgently, the few cocoa exporters doing business in the state might relocate to neighboring states, which would result in loss of revenue to the state.

    The statement reads, “The main duty of the cocoa monitoring team in all the cocoa producing states is to prevent smuggling of cocoa out of the states.

    “They check the produce papers to know if the necessary fees were paid into the state government’s account. Ensure that the consignment has an evacuation check test certificate issued by the Produce Department Ministry of Trade and Investment.

    “They build check posts at border routes to ensure that the cocoa is graded. The cocoa monitoring team has no business going from one warehouse to another, extorting money from the cocoa merchants.

    “It is the constitutional duty of the state produce department to grade all cocoa, collect all necessary fees and issue receipts, seal the cocoa bags, and issue evacuation check test certificates, before the cocoa is lifted out of the state.

    “The present cocoa monitoring team was inaugurated by the Deputy Governor on 18th October 2024. They held their inaugural meeting on 30th October 2024, without inviting the major key stakeholders, CAN & CFAN. That was when they came out with what they called ‘Produce Modalities for the 2024 cocoa season. This was masterminded by Mrs. Sarah Uzochukwu, the secretary of the monitoring team.”

  • IFC, Johnvents partner to boost Nigeria’s cocoa production, export

    IFC, Johnvents partner to boost Nigeria’s cocoa production, export

    To help strengthen Nigeria’s agricultural sector and support the livelihoods of thousands of farmers, International Finance Corporation (IFC) and Johnvents Industries Limited have announced a partnership to expand the company’s cocoa processing operations and increase its export capacity to global markets.

    IFC’s $23.3 million financing package, which includes local currency funding in Nigerian Naira, will allow Johnvents to expand its cocoa processing plant in Ondo State, Nigeria, and double its production capacity to up to 120 metric tons of cocoa per day, helping to provide steady incomes for farmers in its supply chain.

    The financing package includes an $8.5 million loan from IFC’s own account, a $6.3 million loan equivalent in Nigerian Naira with support from the local currency facility of the International Development Association’s Private Sector Window, and an $8.5 million loan by the Private Sector Window of the Global Agriculture and Food Security Program (GAFSP).

    As part of the partnership, IFC will also provide advisory services to Johnvents to help the company increase women’s participation in its workforce and across its value chain. IFC will also help strengthen the company’s ongoing sustainability and traceability program and advise Johnvents on enhancing efficient digitization and sourcing of its current processing capacity of cocoa-based products, including butter, cake, and powder for chocolates, confectionaries, and health products.

     To support Johnvents’ sustainability efforts, IFC’s financing package will enable the company to replace inefficient diesel generators and wood-based boilers with a new efficient power generation system that uses natural gas to produce electricity and thermal energy, resulting in fewer emissions.

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     “IFC’s partnership with Johnvents marks another giant step in our commitment to transform Nigeria’s cocoa sector and agriculture industry. This support will help strengthen our operations and energize our commitment to sustainability, traceability, and inclusive growth. By doubling our production capacity and increasing export potential, we aim to deliver more value to all stakeholders and significantly contribute to the nation’s economic diversification and development. We are immensely grateful for IFC’s support,” said Group Managing Director, Johnvents Industries LimitedJohn Alamu.

     “Agribusiness plays a critical role in fostering value addition and diversifying Nigeria’s economy. IFC’s financing and advisory support for Johnvents will help strengthen the company’s operations, develop Nigeria’s cocoa sector, and sustain and create thousands of jobs,” said  IFC Managing Director, Makhtar Diop.

     Johnvents has a target to achieve 100 percent traceable cocoa, with at least 90 percent certified, by 2027, and to improve traceability protocols for Nigeria’s cocoa produce for international markets.

  • Stakeholders allay flood concerns on cocoa export

    Stakeholders allay flood concerns on cocoa export

    Stakeholders are hopeful that flooding won’t significantly impact Nigeria’s cocoa exports. This is as a tonne of cocoa surpasses $10,000 in price per tonne.

    They, however, advised farmers to be on the lookout and take precautions against flooding.

    According to the Nigeria Hydrological Services Agency (NIHSA), severe weather is expected in many important cocoa-producing states this year, including Cross-River, Ogun, Ondo, Osun, and Oyo. This has sparked worries that the farming sector may suffer losses.

     Concern has been raised regarding possible disruptions to crop operations due to the NIHSA’s prediction of unfavorable weather in important cocoa-producing states. The Federation of Agricultural Commodities Association of Nigeria (FACAN), among other stakeholders, stressed the importance of preparedness and proactive measures to mitigate risks associated with flooding.

    Compared with a crop like rice, cocoa plants, according to World Bank consultant, Prof. Abel Ogunwale, are more resilient, despite growing concerns about planting and mid-crop harvest interruptions.

    He, however, expressed worries about how floods would affect agricultural infrastructure and make it more difficult for farmers to reach fields and properly manage crops.

    He stated that farmers who grow rice and other crops may be seriously threatened by flooding, which might result in severe damage to infrastructure and operations.

     He pointed out that because rice usually grows in wet fields, it was especially susceptible to floods.

    He called for further action to lessen the effects of flooding on agriculture.

     suggesting that better water management strategies be used, such as the building

     He urged for increased efforts to mitigate the impact of flooding on agriculture may include improved water management techniques, such as the construction of drainage systems and levees, as well as the development of flood-resistant crop varieties.

    Responding to the issue also, the  Federation of Agricultural Commodities Association of Nigeria (FACAN) President, Dr. Victor Iyama, noted that rising concerns that Nigeria’s cocoa planting and mid-crop harvest may be disrupted as the Hydrological Service Agency warned of heavy flooding in the country’s main cocoa growing areas was merely speculative.

    He added however that it was  essential for farmers to remain vigilant and implement measures to mitigate the risks associated with extreme weather events. This includes improving drainage systems, implementing soil conservation practices, and diversifying crops to reduce vulnerability to flooding.

    The Minister of Water Resources and Sanitation, Prof. Joseph Utsev, highlighted the significance of the 2024 Annual Flood Outlook (AFO) and cautioned about the high probability of flood risks in 148 Local Government Areas (LGAs) across 31 states.

    Read Also: WACOT, Swiss firm strike deal for Nigerian cocoa

    Utsev, during the official unveiling of the 2024 Annual Flood Outlook (AFO ) published NIHSA s cautioned that 148 Local Government Areas (LGAs) across 31 states are among the highly probable flood risk areas for 2024.The identified states are: Adamawa, Akwa-Ibom, Anambra, Bauchi, Bayelsa, Benue, Borno, Cross-River, Delta, Ebonyi, Edo, Imo, Jigawa, Kaduna, Kano, Katsina, Kebbi and Kogi.

    Others are: Kwara, Lagos, Nasarawa, Niger, Ogun, Ondo, Osun, Oyo, Plateau, Rivers, Sokoto, Taraba, and Yobe.

    Utsev emphasised the importance of proactive measures to mitigate potential flood impacts in these areas.

    He said there was need for preparedness, early warning systems, and community engagement to minimise damage to lives and property.

    World Bank in its latest Food Security Update listed Nigeria alongside Afghanistan, Somalia, South Sudan and Yemen as hotspots of global food security concerns, citing the absence of food storage

  • Farmers happy as cocoa prices hit 8,000 pounds per tonne

    Farmers happy as cocoa prices hit 8,000 pounds per tonne

    Nigerian farmers are in for festive season with  cocoa prices hitting  $10,000 and F8000 a tonne at  various exchanges in the United States and United Kingdom.

    Cocoa prices have more than doubled this year as the crop’s production in Ivory Coast and Ghana, which together make up about 60 per cent of the world’s output, have been ravaged by disease. This is the third year in a row that the global market faces a deficit.

    Major companies abroad  use pure cocoa butter to produce large volumes of chocolates.

    Speaking with The Nation, Osun State Commissioner for Agriculture and Food Security, Tola Faseru, also a commodities exporter,   noted that there had been an unprecedented rise in cocoa prices.

    The highest  in 45 years, international companies have been pressured to  hike prices of  chocolates.

    According to him, the increase in the price of cocoa has made farmers focus more on the crop.

    His words: “Particularly 2023 to 2024,there has been  a shortage,  close to 40 per cent shortage to cocoa production output.This is occasioned by the drop in Ghana and Ivory Coast production.These two countries contribute 60 percent of the global production.In the world ranking, we have  Ivory Coast, then Ghana, Indonesia and Nigeria. At the beginning of 2023, it was 2000 pounds a tonne, now it is 8000 pounds.

    “Cocoa prices have risen  so much. In fact, this year, it is more than last  year. In March, it has doubled. So, you can imagine, it’s an all-time high.Cocoa is about  one of the mosttraded commodities.How do I put  it? Highly priced commodity. One of the most or the best performing commodities in 2023 and 2024 so far.’

    Read Also: 2027: Obi, Obidients are not our concern now, we are busy with governing Nigeria – Onanuga

    “In  all these, it is producers in Nigeria that are really making money, compared to   farmers in these two countries.What we have in Nigeria is a free market. Farmers are free to determine their price.

    “This put them in a good position.  Unlike in Ghana where the government buys from the farmer at a fixed price. An average cocoa farmer in Nigeria is dancing. He is able to do more, buy a car, enjoy a better livelihood, and take better care of his family. With these I believe there’ll be a lot of investment in  the  sector.”

    According to him, the Osun State government is taking advantage of the  situation to increase cocoa production.”

    In February,  cocoa prices hit an all-time high of $9,010.59 per tonne at the New York Commodities Exchange.

    Over the past year, the price per tonne of cocoa has tripled, skyrocketing from $2,000 to over $6,000 in the regular markets.

    Agribusiness & Youth Empowerment Coordinator, Community of Agricultural Stakeholders of Nigeria (CASON), Sotonye Anga, noted that it was the best times in the industry as cocoa prices reached unprecedented heights, with economists projecting no downward trend through the year.

    Anga was delighted that the  surge in pricing, though usually short-lived, was already having a ripple effect on the industry, with chocolate makers adjusting their operations to stay afloat.

    He noted that the   industry needed  higher prices to encourage farmers to invest in the business.

  • Farmers smile as cocoa hits $9,010.59 per tonne

    Farmers smile as cocoa hits $9,010.59 per tonne

    Cocoa farmers may have been smiling to the bank as the produce price hit an all-time high of $9,010.59 per tonne at the New York Commodities Exchange.

    Over the past year, the price per tonne of cocoa has tripled, skyrocketing from $2,000 to over $6,000 in the regular markets.

    Nigerian cocoa farmers and exporters are reaping big as global cocoa prices hit record high, thanks to the steep naira devaluation that has resulted in a sharp increase in income from the export of the beans.

    Agribusiness & Youth Empowerment Coordinator, Community of Agricultural Stakeholders of Nigeria (CASON), Sotonye Anga noted that it was the best time in the industry as cocoa price reached unprecedented heights, with economists projecting no downward trend through the year. 

    The spiralling price increase follows unfavourable weather conditions causing significant impact on cocoa production in Nigeria, Ghana and Ivory Coast.

    Anga was delighted that the   surge in pricing, though usually short lived, was having a ripple effect on the industry, with chocolate makers adjusting their operations to stay afloat.

    Chocolate manufacturers, as a result of rising primary ingredient costs, are bracing for a potential demand slowdown.

    Ingredients supplier Henley Bridge has reported that  cocoa price increases of 15-20 per cent for the first half of the year are expected to continue for the remainder of the year.

    Anga was of the opinion that industry needs higher prices to encourage farmers to invest in the business. Cocoa is a key ingredient in making chocolate. Right now, the  farm-gate price is between N6.5million and N 7 million. 

    Encouraged by this, some farmers are mopping up the beans from neighbouring West African countries to sell to exporters.

    For Anga, the naira devaluation and surge in global prices owing to a shortfall from top producers is benefitting cocoa farmers greatly. Nigeria, the world’s fourth-largest cocoa producer and supplier, saw the value of its global supply decline by 3.4 per cent to 280,000 metric tonnes in the 2022–2023 season, according to the International Cocoa Organisation’s latest data on global production (ICCO).

    Last year, Cocoa futures prices  surged more than $1,000 or nearly 40 per cent since the start of the year to hit an all-time high of $5,874 per metric tonne as bad weather conditions hammer crop yields in West Africa, home to three quarters of the world’s production.

    In Ondo State, graded cocoa, certified fit for export, traded as N 2.5 million a metric tonne, while in Cross River State, the second-largest cocoa producer, cocoa fetched between N2.4 million and N2.5 million a tonne.

    Read Also: Osun monarch’s new chocolate production deal for cocoa farmers

    While cocoa is selling very high in London and in New York, the President, Federation of Agriculture Association of Nigeria (FACAN), Dr Victor Iyama, says local cocoa farmers are not smiling to the bank because it has not impacted on their profits. On the average, he said growers receive about six per cent of the price that consumers in rich countries pay for chocolate. Iyama said farmers receive a fixed price from agents of chocolate manufacturers at the season. The price offered by agents of chocolate manufacturers, he said, limits their ability to make profit when prices go up. While the profits of multinational chocolate companies have increased, he said cocoa farmers receive only a part of the world market price for beans. According to him, it is the big companies in chocolate manufacturing that are making high profits. He noted that it was time individual cocoa producing countries began to set prices for the produce they export.

    To this end, he indicated that operators in the sector are rallying to see the emergence of Africa Cocoa Exchange to revolutionize cocoa marketing in Africa. According to him, the exchange will bring positive impact to achieving a sustainable world cocoa economy. The global cocoa industry is worth $200 billion annually and West Africa, which produces 75 percent of the world’s cocoa supply, makes less than $10 billion annually from it. The Managing director of the Nigerian Export-Import Bank (NEXIM), Abba Bello, represented by Tayo Omidiji, general manager/head of strategy and corporate communications, NEXIM Bank recently at a press briefing to announce the International Cocoa and Chocolate Forum (ICCF) 2024 which was  held in Abuja in  January this year added that there was a need for all hands to be on deck amongst all stakeholders, including policymakers, researchers, organised private sector and financial institutions, to discuss strategies to crowd in investments and address all the other issues militating against the huge potentials in the Nigerian Cocoa industry.“It is instructive to note that the cocoa industry (including beans, cake, chocolate, etc.) is worth $200 billion annually, out of which the entire West African producing region (made up of Cote d’Ivoire, Ghana, Cameroon, and Nigeria), which accounts for about 70-75 percent of the global output, earns only $10 billion.

  • Osun monarch’s new chocolate production deal for cocoa farmers

    Osun monarch’s new chocolate production deal for cocoa farmers

    Gureje IV chocolate bars, a brand-new line of chocolate bars, has hit the global market. It came on the strength of a partnership brokered by the royal family of Eti-Oni, a rural cocoa community in Osun State, Oba Dokun Thompson Gureje IV and Queen Angelique-Monet, with Lancashire’s luxury chocolatiers, Beech’s Chocolates, based in the UK. Under the collaboration, Gureje IV chocolate bars will be produced with cocoa beans sourced from Eti-Oni. The deal promises to boost the fortunes of cocoa farmers in the state and ultimately, help transform Nigeria’s cocoa sector. EKAETE BASSEY reports.

    The people of Eti-Oni, a rural cocoa community, in Osun State, South West Nigeria, are upbeat. Prospects of a dramatic turnaround in the fortunes of cocoa farming particularly the immense value to be added to the cocoa beans they sell on the open market have put them in a jubilant and expectant mode.

    And it took the rare entrepreneurial prowess of the Eti-Oni royal family of Oba Dokun Thompson Gureje IV and Queen Angelique-Monet to propel the people of Eti-Oni, considered home to Nigeria’s oldest cocoa plantation, into a sustainable cocoa culture, which is the vision of His Majesty.

    Specifically, the stage for what is arguably, a new deal for cocoa farmers in Osun State and by extension, Nigeria was set with the official launch of Gureje IV chocolate bars. And the unveiling of this brand-new line of chocolate bars was on the behest of Oba Dokun Thompson Gureje IV and Queen Angelique-Monet, who entered into a partnership with Lancashire’s luxury chocolatiers, Beech’s Chocolates.

    Under the partnership, Beech’s Chocolates, in Preston, will be making the new line of chocolates, Gureje IV chocolate bars, with cocoa beans sourced from Eti-Oni province in Osun State, South West Nigeria.

    It is easy to see why the people of Eti-Oni town in the Atakumosa East Local Government Area of the state are over themselves with excitement and joy. For instance, proceeds from the chocolate bars by the UK chocolate factory will go back to the people. King Dokun confirmed this much, saying: “All profits will be retained by the people of Eti-Oni and invested in chocolate processing equipment, among other things, to add value to the cocoa beans they sell on the open market.”

    He added that the collaboration with Beech’s Chocolates will benefit the future of cocoa farming in Eti-Oni where his great-grandfather started the plantation in 1896 as well as the people.

    The Nation learnt that the revered Osun monarch, alongside his queen, was received by the Preston chocolate makers, last week, at their factory in Fletcher Road, Lancashire, United Kingdom (UK) to launch the bars. “When we start seeing the proceeds from the chocolate, we know that we are on to something that will transform our community,” King Dokun stated.

    According to him, over 90 per cent of Eti-Oni’s people are cocoa farmers, working in an industry worth $130 billion a year. But the growers in Eti-Oni only receive a fair trade allowance on top of the price they sell the beans at.

    The Whiting Family, owners of Beech’s Confectionery Group, actively contributed to the launch of the Gureje IV brand, with the Eti-Oni people keeping 100 per cent of the net profit. Beech’s Chocolates supplied the startup funding, but moving forward, the business will be self-sustaining and expected to generate a lot more money than any “fair trade” cocoa programme currently in place in the nation.

    Milk the Cow, the Queen’s cheery puppet sidekick, joined her with the king on their special visit to Preston’s historic chocolate factory for the unveiling of their single-origin Gureje IV chocolate bars.

    The American-born Queen Angelique-Monét expressed delight at the collaboration. “This is an exciting partnership. It brings international exchange and helps to create a sustainable cocoa culture, which is the vision of His Majesty.

    “Most importantly, we are proud of our cocoa as well as the cocoa farmers in our community – the oldest cocoa plantation in Nigeria. And so, we are also excited that this is the first time children in our community will have a candy bar. So, that’s so exciting for us,” she said.

    Demonstrating even greater enthusiasm for the chocolate bars, which she tagged a gift of heritage from the land of Eti-Oni, the “Ventriloquist Queen” added: “Every purchase helps the cocoa farmers achieve the vision of His Majesty Oba Dokun Thompson, Gureje IV, to transform the rural cocoa community into a sustainable model smart town.”

    Beech’s Chairman, Andrew Whiting, said he first met King Dokun at a chocolate convention in 2018, where the latter gave a very moving speech about the fact that they’d been growing cocoa beans for many years and the idea of the chocolate range sprang from a conversation they had later. He said: “We had this idea that if we could produce a chocolate bar sold in the western markets, all the proceeds could go towards making the processing plant a reality.”

    Whiting emphasised that the Gureje IV chocolate is single origin Nigerian cocoa from Osun State and “the milk 35 per cent and dark 70 per cent are both smooth and delicious.”

    Read Also:Why Nigeria experiences declining cocoa production, export

    “When people buy these bars they are directly helping the people of Eti-Oni to safeguard their future,” he added. On the chocolate company’s website alongside other sales outlets, the single of Gureje IV bars retail at £5.99, about N12,300, while a case of 12 bars retail at £60.00, about N123,000.

    Eti-Oni is one of the many towns that comprise the venerable and magnificent Kingdom of Ilesa in the South-West. It is the home of the second oldest known cocoa plantation in Nigeria with the oldest in Ijon, Lagos. It is believed cocoa was first introduced in Nigeria at Ijon by Captain JPL Davies, and from Eti-Oni, cocoa was spread to many other communities of the South West in the country.

    Before crude oil was discovered in the country in the late 1950s, the crop was a significant source of income for the country’s then-South West region and eventually one of the country’s most important cash crops. Nigeria, according to the United Nations Food and Agriculture Organisation (FAO), is world’s sixth largest cocoa producer, behind Cameroun, Brazil, Indonesia, Ghana, and Ivory Coast.

    For instance, at the last count, the Nigerian Export-Import Bank (NEXIM) put the global value of raw cocoa export at $10 billion, while the total value of all finished goods from cocoa is $200 billion annually, with chocolates alone accounting for $100 billion. Sadly, Nigeria, despite being ranked world’s sixth largest cocoa producer does not boast a vibrant chocolate industry to process cocoa into chocolate and other finished products.

    The consensus is that the processing of cocoa into cocoa derivatives, including chocolate, is the highest value adding activity in the cocoa value chain. It has the potential to generate significant export revenues both to the government and cocoa farmers.

    With the Osun monarch throwing his royal hat in the chocolate-producing ring, the belief is that he has set a template to hopefully, reverse the trend where Nigeria’s cocoa is exported without much, if any, value addition.

  • Global cocoa industry worth $200b

    Global cocoa industry worth $200b

    • Nigeria, others earn 5% revenue from cocoa industry

    The Nigerian Export-Import Bank (NEXIM) has said the global cocoa industry is worth $200 billion annually and West Africa, which produces 75 per cent of the world’s cocoa supply, makes less than $10 billion annually from the industry.

    According to NEXIM, Nigeria has lost its leading position in the production and export of cocoa over the years, now ranking as fourth producer behind Cote d’Ivoire, Ghana and Indonesia.

    The disclosure was made by the Managing Director of the Nigerian Export-Import Bank (NEXIM), Abba Bello, at a press briefing to announce the International Cocoa and Chocolate Forum (ICCF) 2024 to be held in Abuja on the 9th and Lagos on the 11th of January.

    Represented by General Manager/Head of Strategy and Corporate Communications, Tayo Omidiji, NEXIM Bank added that there is a need for all hands to be on deck amongst all stakeholders, including policymakers, researchers, organised private sector and financial institutions, to discuss strategies to crowd in investments and address all the other issues militating against the huge potentials in the Nigerian Cocoa industry.

    According to him, the upcoming summit aligns with the Renewed Hope Agenda of the President Bola Tinubu’s administration to promote economic diversification, address scarcity of foreign exchange, and enhance job creation nationwide.

     ”It is instructive to note that the cocoa industry (including beans, cake, chocolate, etc.) is worth $200 billion annually, out of which the entire West African producing region (made up of Cote d’Ivoire, Ghana, Cameroon, and Nigeria), which accounts for about 70-75 per cent of the global output, earns only $10 billion.

    Read Also: NEXIM Bank MD reiterates need to add value to cocoa exports

    “To further drive home the point, I would like to refer to the report by the International Trade Centre (ITC) in 2021,” he said.

    He noted that Nigeria produced 208 metric tons (Mt) of cocoa beans in 2021 but generated a total income of $628 million, citing ITC data. However, Germany, which did not produce cocoa earned a whopping $57.3 billion from the export of cocoa products, he said.

    Bello explained that Nigeria has lost its leading position in the production and export of cocoa over the years to now rank about the fourth producer behind countries like Cote d’Ivoire, Ghana and Indonesia owing “to aged plantations and lack of investment in the sector over the years.”

    The International Cocoa and Chocolate Forum (ICCF) 2024 Nigeria edition is being organized in partnership with NEXIM Bank and Cocoa Research Institute of Nigeria, CRIN, and this edition is themed, ‘Putting Value in Cocoa at Producing Regions.’

    The Oloni of Eti-Oni, Osun State and founder, International Cocoa Diplomacy, Dokun Thompson, said ICCF 2024 Nigeria is a follow-up on the discussion at the recently concluded UK edition in October 2023 which had the theme: The new EU policy, its effect on cocoa producing regions and the way forward for the global cocoa trade and an industry that supports transformation with regards to the resilience of cocoa farmers to be held both in Abuja and Lagos.

    “ICCF2024 – Nigeria is a call to action to continue the discussion where policy formation will meet investment requirements for the sole purpose of creating the cocoa culture that will begin to intentionally add value to cocoa and create wealth at origin to reduce the dominance of the industry by consuming regions and also to explore ways for shared value and prosperity creation purposes.

    “There will also be other panelists of policymakers and stakeholders who will discuss several important topics including: the impact of EUDR compliance on the Nigeria cocoa sector: Opportunities and Consequences, COP28 Resolutions: Climate-resilience in the Nigerian cocoa sector, and expand thinking beyond cocoa beans and the opportunities for investment and job creation,” Thompson said.

  • Stakeholders urge African countries on cocoa prices

    Stakeholders urge African countries on cocoa prices

    While cocoa is selling between $4,458 and $4,522 per tonne in London and in New York, the President, Federation of Agriculture Association of Nigeria (FACAN), Dr  Victor Iyama, says local cocoa farmers are not smiling to the bank because it has not impacted on their profits.

    On the average, he said growers receive about six per cent of the price that consumers in rich countries pay for chocolate.

    Iyama said farmers receive a fixed price from agents of chocolate manufacturers at the season.

    The price offered by agents of chocolate manufacturers, he said, limits their ability to make profit when prices go up.

    While the profits of multinational chocolate companies have increased, he said cocoa farmers receive only a part of the world market price for beans.

    According to him, it is the big companies in chocolate manufacturing that are making high profits.

    He noted that it was time individual cocoa producing countries began to set prices for the produce they export.

    To this end, he indicated that operators in the sector are rallying to see the emergence of Africa Cocoa Exchange to revolutionize cocoa marketing in Africa. According to him, the exchange will  bring positive impact to achieving a sustainable world cocoa economy.

     Recognizing that a “commodity exchange is an inclusive but market-friendly and financially sustainable solution for imposing structure on Africa’s often fragmented agricultural value chain”, the International Cocoa Organization (ICCO) commissioned a study to assess the technical feasibility and financial viability of establishing an Africa Cocoa Exchange (AfCX).

    The feasibility study was split into two phases (Phase I and Phase II) to allow for a constructive stakeholders’ engagement and a systematic and logical approach to identifying a suitable exchange model that is appropriate for Africa.

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    Phase I of the study involved a detailed analysis of the cocoa value chain and sectoral regulations in Côte d’Ivoire, Ghana, Nigeria, and Cameroon. The study will provide a detailed assessment of the Africa commodity exchange experience through a survey of Africa’s currently operational commodity exchanges, identification of a limited set of institutional design options of a commodity exchange with three components of spot, derivative and finance and engage stakeholders for selection of an appropriate model of an Africa Cocoa Exchange (AfCX).

    Phase II of the study, will cover defining the interfaces between spot, derivatives, and financing components of the AfCX, specifying the functional and infrastructural scope, resources, workflows, and frameworks of the AfCX, articulating the role of AfCX with respect to the wider environment (sectoral regulations, institutional regulations, physical markets, and terminal markets) and Pilot testing of the AfCX to demonstrate proof of concept.

  • NEXIM Bank MD reiterates need to add value to cocoa exports

    NEXIM Bank MD reiterates need to add value to cocoa exports

    • Edun, Kwara First Lady to attend ICCF 2024

    The Managing Director/Chief Executive of Nigerian Export-Import Bank, Abba Bello has reiterated the need for Nigeria to add value to its cocoa exports as a major step towards maximizing the benefits of investments in the sector.

    At a joint press conference heralding the 2024 International Cocoa and Chocolate Forum (ICCF), billed to be held in Lagos and Abuja in January, Bello described cocoa as a leading non-oil export commodity in Nigeria which was a major driver of foreign exchange earnings for the country during the pre-oil era.

    Represented by Mr. Tayo Omidiji, NEXIM Bank’s Head of Strategy and Corporate Communication, Bello said Nigeria had lost its leading position in the production and export of cocoa over the years to now rank as the 4th producer behind countries like Cote d’Ivoire, Ghana, and Indonesia.

    The ICCF is the main platform for International Cocoa Diplomacy for networking, partnerships, collaboration, ideas and cultural exchange, bilateral trade, opportunities, learning, and forming new alliances.

    The event, themed: ‘Putting Value in Cocoa at Producing Regions,’ is being organized in partnership with the Nigerian Export and Import Bank, NEXIM Bank, and Cocoa Research Institute of Nigeria (CRIN).

    Minister of Finance and Coordinating Minister of the Economy, Chief Olawale Edun; First Lady of Kwara State, Nigeria, Ambassador (Prof) Olufolake Abdulrazaq who is the Honorary Global Ambassador of International Cocoa Diplomacy; and Minister of Agriculture, Senator Abubakar Kyari are among the dignitaries expected at the event.

    ICCF is billed to take place at the Transcorp Hilton Hotel, Abuja on Tuesday 9th January 2024 while the event would also come up in Lagos at Four Points by Sheraton Hotel, Victoria Island, Lagos on Thursday 11th January 2024.

    Speaking on behalf of the Executive Director, the Cocoa Research Institute of Nigeria (CRIN), Dr. Patrick Adebola, the Director, Cocoa Programme of the institute, Dr. Samuel Orisajo said that CRIN would provide necessary support to cocoa farmers to ensure that they got it right in terms of best agricultural practices and add value to their cocoa to make maximum gains.

    The Managing Director of Sunbeth Global Concept, Mr. Olasunkanmi Owoyemi also urged the Nigerian government to put necessary policies in place to prevent the exploitation of cocoa farmers by enhancing the cocoa value chain that would also protect the local cocoa economy players.

    A member of the ICCF2024 Team, Mr. Shola Mohammed told journalists that ICCF is billed to take place both in Lagos and Abuja.

    Mohammed said the ICCF-2024-Nigeria was a follow-up on the discussion at the recently concluded UK edition in October 2023 with a focus on the new EU policy, its effect on cocoa-producing regions, and the way forward for the global cocoa trade.

    According to him, “ICCF2024-NIGERIA is a call to action to continue the discussion where policy formation will meet investment requirements for the sole purpose of creating the cocoa culture that will begin to intentionally add value to cocoa and create wealth at origin to reduce the dominance of the industry by consuming regions and to also explore ways for shared value and prosperity creation purposes.

    He said the event would bring policymakers, financial institutions, and stakeholders from across the continent together to explore ways of taking advantage of the African Continental Free Trade Area, AfCFTA, and other emerging cocoa and chocolate markets to optimize the potential.

    He also said the Minister of Finance and Coordinating Minister of the Economy, Chief Olawale Edun would be the Chairman of the Forum in Abuja and will declare the forum open with an address that will focus on the future of cocoa and value adding  and the role it is expected to play in Nigeria’s emerging and transformational economy.

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    He added that the Minister of Agriculture, Senator Abubakar Kyari would be the Special Guest and Keynote Speaker to deliver an address on Productivity versus Production in Agriculture in relation to Value Creation within the singular market, AfCFTA.

    He said the First Lady of Kwara State, Nigeria, Ambassador (Prof) Olufolake Abdulrazaq who is the Honorary Global Ambassador of International Cocoa Diplomacy would deliver a goodwill message with a focus on the importance of diplomacy to address the several issues facing the cocoa industry.

    Mohammed said the First Secretary, Trade and Economic Issues at the EU Delegation to Nigeria and ECOWAS, Mr. Rikard Nordeman would make a presentation on the much talked about EU Regulation on Sustainability known as EUDR and that there will also be other panelists of policymakers and stakeholders who will discuss several important topics.

    The topics include: ‘The Impact of EUDR Compliance on the Nigeria Cocoa Sector: Opportunities and Consequences,’ ‘COP28 Resolutions: Climate-resilience in the Nigerian Cocoa Sector,’ and ‘Expand Thinking Beyond Cocoa Beans and the Opportunities for Investment and Job Creation.’

    Mohammed told journalists that the Lagos session would be declared open by the state Governor, Mr. Babajide Sanwo-Olu as Chief Host and that the Governor would also deliver an address on Lagos as the nation’s centre of excellence with the possibility of a defined cocoa culture and its huge value and wealth creation potential.

    He said: “This is to seize the opportunity of Lagos being the biggest market in the continent and bring together investors, entrepreneurs, equipment providers, etc to look into new business models that will encourage partnerships and collaboration to accelerate value addition in Nigeria and subsequently the continent.

    The Honourable Minister of Trade and Investment is also expected at the Lagos Session as Special Guest and Keynote Speaker to deliver an address on Collaboration and Partnership as the key to unlocking investment opportunities within AfCFTA and reaching emerging markets as well as the Honourable Minister of Environment who will deliver a keynote on the link between Sustainability and Investments for a global market.

    Some of the topics for discussion at the Lagos Session include: ‘Opportunities for Wealth Creation within AfCTA: Looking at Cocoa in a New Light,’  ‘Cocoa value add opportunities, the Barriers and Solutions for Success” as well as ‘The Future of Cocoa and its Transformational potential.’

  • Cocoa prices are surging: W/African countries should seize the moment to negotiate a better deal for farmers

    Cocoa prices are surging: W/African countries should seize the moment to negotiate a better deal for farmers

    By Michael E Odijie

    The global price of cocoa is spiking, a direct response to dwindling cocoa output in West Africa. In September, cocoa futures reached a 44-year price peak due to mounting concerns over reduced supplies from the region.

    The price surge could prove to be a critical moment for cocoa farming and policy in West Africa.

    The cocoa-producing belt of West Africa is responsible for generating over 80% of the total global output. Between them, Ghana and Côte d’Ivoire contribute more than 60% to the global output. Ghana is the second-biggest producer in the world and cocoa is a vital component of the country’s economy.

    The global price spike has led West African governments to increase the guaranteed producer prices to farmers. Ghana recently raised the state-guaranteed cocoa price paid to farmers by two thirds. The announcement means that Ghana’s cocoa farmers will be paid 20,943 cedis (US$1,837) per tonne for the upcoming 2023-2024 season, up from 12,800 cedis.

    Cameroon, the world’s fourth-largest cocoa producer, raised the price cocoa farmers get to 1,500 CFA francs (US$2.50) per kilogram, a 25% jump from the previous rate of 1,200 CFA francs. This increase is even more significant than Ghana’s when factoring in Cameroon’s single-digit inflation. Additionally, the Cote d’Ivoire government has announced a rise in the producer price.

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    As an economics researcher who has extensively studied and written about cocoa production in West Africa, I contend that the recent shortages can be harnessed to strengthen the position of cocoa producers. This will enable them to address the structural challenges ingrained in the cocoa production value chain. Rising production costs have not been recognised in the value of cocoa beans. Farmers therefore haven’t been able to earn enough income and this has led to unsustainable farming practices.

    In my view, West African countries should use the cocoa shortage as negotiating leverage against multinational corporations to address these structural issues. Both Ghana and Côte d’Ivoire must recognise this pivotal moment. They must take the lead, and frame the current production challenges as deep-seated structural problems requiring solutions, rather than as short-term issues.

    What’s driving the change?

    Ghana’s cocoa regulator recently indicated that its farmers might not be able to meet some cocoa contract obligations for another season. Ghana’s projected cocoa yield for the 2022/23 planting season was the lowest in 13 years, falling 24% short of the initial estimates of 850,000 metric tonnes.

    This trend has been repeated across the region, with production falling in Côte d’Ivoire and Cameroon.

    Reduced output means demand can’t be met and global prices rise.

    The reduction in cocoa output is attributed to short-term and long-term factors.

    Commentators typically emphasise the short-term factors:

    • Poor weather conditions

    • Black pod disease, which causes cocoa pods to rot

    • The decline in the number of cocoa farmers, some of them selling their land to illegal miners

    • A shortage of fertilisers and pesticides, especially since the conflict in Ukraine has curtailed Russia’s export of potash and other fertilisers.

    A number of long-term structural issues have beset cocoa farming in West Africa for decades. They shouldn’t be overshadowed by concerns with short-term problems.

    The first is the declining availability of forest land and its connection to increasing production costs.

    Over the last two decades, depletion of forest land has led farmers to turn to grasslands for replanting cocoa plants. This requires extensive land preparation, regular weeding around the cocoa trees, pruning, and the application of fertilisers and pesticides. What’s more, the plants are highly susceptible to disease. All these things result in increased labour costs.

    None of these additional burdens have been incorporated into the pricing for sustainable cocoa production. In light of the new cost structure, cocoa beans have been undervalued for decades. Farmers have become poorer and are exploring alternative sources of livelihood.

    The cost of sustainably cultivating cocoa in grasslands must be reflected in the price that farmers receive. Relying solely on market forces will not achieve this. For instance, every year, typically in September, the Ghana Cocoa Board announces the official producer price for cocoa beans for the upcoming cocoa season on behalf of the government. This official price is based on the anticipated export market price, with an understanding in Ghana that farmers should receive approximately 70% of it. However, the resulting market price, and consequently the producer price derived from it, often falls short of covering the costs of sustainable cocoa cultivation.

    A path forward

    What would it cost for cocoa farmers to cultivate cocoa beans sustainably, and ensure a living income, without contributing to deforestation or resorting to child labour?

    If the market price falls below this cost (which isn’t static), then the farmers face exploitation, giving rise to many of the problems that plague the industry.

    A few years ago, Ghana and Côte d’Ivoire pioneered the introduction of the “living income differential” – a premium that cocoa buyers would pay on top of the market price to ensure that farmers earned a sustainable income from their produce. Despite its noble intent, the initiative faltered. It was not well thought through. And it came at a time when these countries had diminished bargaining clout in a saturated market. Now is a favourable moment.

    The crisis in the sector puts cocoa producers in a stronger negotiating position.

    Ghana and Côte d’Ivoire could collaborate with other regional countries, such as Nigeria and Cameroon, to negotiate a better position for their cocoa farmers, ensuring sustainable cultivation. There are many strategies these countries can explore, including supply management (such as buffer stocks, export controls, or quotas), price premiums and value addition.

    • Odijie is research associate, University College, London. This article is republished from The Conversation under a Creative Commons license. https://theconversation.com/cocoa-prices-are-surging-west-african-countries-should-seize-the-moment-to-negotiate-a-better-deal-for-farmers-214305“