The after shock from the recent devaluation of the naira is still reverberating around the country. From Abubakar Tafa Balewa Way in CBD Abuja, to custom street in Lagos Island and down to the farms in South West Nigeria. A Bloomberg article suggest cocoa some farmers in Nigeria are also set to reap from the recent devaluation of the naira.
According to the article,
Nigerian farm-gate cocoa prices have jumped as much as 20 percent since October as farmers slowed their harvest or sought more money for their crop as the country’s currency plunged. Prices in Nigeria’s southern cocoa belt currently range from 500,000 naira ($2,824.70) to 520,000 naira per metric ton, compared with 430,000 naira to 450,000 naira in October as the main-crop harvest started, according to Oluwole Oginni, chairman of the Cocoa Exporters Association of Nigeria.
“Most exporters are holding forward contracts entered into when a dollar exchanged for 160 naira,” Oginni said in a phone interview yesterday from Lagos, the commercial capital. “We are forced to dance to their tunes, accept at their offers and thus cut our losses.”
This suggest farmers are set to reap from exporters who had locked in future farm produce when the dollar was still exchanged at a price of N160. Now that it has been depreciated, the farmers are well placed to gain whist the exporters will someone take in some losses. The article also reveals “Farmers who suspended their cocoa harvests amid heavy rains in October, delayed resumption as pressure mounted on naira, according to Muri Adeniji, managing director of Starlink Global, a Lagos-based shipper of the beans. Only exporters with prior commitments to overseas buyers are continuing to purchase, he said”
It is also important to note that devaluation of a country’s currency typically favors exporters of goods and services.
Get the Bloomberg article here