Cocoa prices settled at $8.796 per ton during the mid-week trading session in the US futures market, as Nigeria increasingly bets on the cash crop upside for the long haul.
Ongoing US tariffs have led to an increase in speculative buying for cocoa futures, which in turn boosted the cash crop’s fortune.
Nigeria is the sixth-largest cocoa exporter globally.
The country produced roughly 280,000 metric tons of cocoa by the end of 2022. The output lagged well behind the top three producers, despite an increase to 340,000 at the beginning of 2024. The National Cocoa Management Board has set a goal to further increase that figure, reaching a level of 500,000 metric tons.
Major bullish driver, most notably a historic supply shortfall, still dominates, while growing global inventories of cocoa support price increases to some extent.
However, weather disruptions, erratic supply, coupled with tariff uncertainty, have weighed negatively on the global cocoa market.
Ivory Coast is the global leader, producing more than 2 million tons a year. Ghana: Annual production ranges from 650,000 to 800,000 tons. Indonesia generates roughly 739,500 tons per year.
The Cash crop is Nigeria’s main source of non-oil foreign exchange earnings. The most populous African nation may record higher cocoa exports because of strong demand and growing global prices.
Vice President Kashim Shettima discussed the federal government’s strategic focus on boosting cocoa processing levels. As he said, “We don’t want to be just producers of cocoa; we want to be processors of cocoa because a ton of cocoa currently fetches $9,000, but processed cocoa can bring $30,000. Turning them into chocolate bars could fetch you $50,000.”
NBS data revealed that Nigerian high-quality cocoa beans are among the country’s top exports, along with oil products. However, in imports, the country imports cocoa powder from ECOWAS countries, highlighting insufficient local processing. Sector operators have appealed to the federal government to strengthen the industry by enforcing mandatory local consumption of chocolate products, including their use as school snacks.
Abolarinwa, President of the Cocoa Farmers Association of Nigeria, stated the country’s demand for chocolate locally was weak. “We ask ourselves why there’s no real local market for it? The answer is to make it compulsory in school diets for children within primary and secondary school age.” Nigeria is working tirelessly to revive an industry that could potentially transform its economy.
Nigeria’s Vice President Kashim Shettima reiterated that the present administration intended to focus on Nigeria’s cocoa industry, along with revitalizing the entire agricultural value chain, shifting from production emphasis toward agro-processing.
“We used to be one of the world’s leading cocoa producers, but the advent of oil relegated us to the background,” Shettima observed, adding, “We can reclaim that lost glory. President Tinubu is fully committed not just to cocoa but to the entire agricultural value chain.”
He further disclosed that some recent decisions by the FEC included setting up a National Cocoa Management Board (NCMB), whose primary aim will be to spearhead this transformation
Ghana expects a bumper harvest for 2025/2026 season
Ghana, the second-largest cocoa producer globally, expected a higher yield for the upcoming 2025/2026 season due to better flowering and pod development, despite dealing with seasonal weather changes and ongoing input supply issues.
- The country experienced a decrease in production due to several factors, including rampant illegal gold mining that destroys cocoa plantations, as well as diseases and climate change.
- Growers are cautiously optimistic about the upcoming season, as improved weather conditions and lower disease levels are expected to boost output. Cocobod data predicts Ghana won’t meet its 6,500 metric ton production quota for the 2024-2025 season.
- The regulator has not set any production targets for the new season, which begins in August. Ghana’s output is expected to fall to just 590,000 tons this season.
Côte d’Ivoire and Ghana account for over half of global cocoa production, and with rising demand, they have experienced their worst harvests.
