Cocoa production in Nigeria is projected to increase by as much as 10% on the back of elevated cocoa prices in the international market in the last one year.
The AFEX 2024 wet season report states that the high prices of cocoa in the market are an incentive for farmers to produce more this year.
The report also explained that cocoa seedling projects started in the past few years are now yielding fruits and would be a boost to the cocoa harvest during the period.
It states, “Cocoa production is expected to experience an upward trend this season after several years of decline. This growth is primarily driven by historically high cocoa prices, which have resulted from increased international demand and supply shortages in major producing countries.”
“Favourable weather conditions in the southwestern region of the country, the primary cocoa-producing area, have also played a significant role. Given the combined impact of these factors, we project a 10% increase in cocoa production this year, with an estimated yield of approximately 320,000 metric tons in 2024.”
Furthermore, the report noted that cocoa production in Nigeria in 2023 further worsened the global supply deficits from major producers like Ghana and Cote d’Ivoire.
The report reveals that around 76% of the cocoa farmers interviewed were smallholders with less than 2 hectares under cultivation, while only about 3% managed more than 5 hectares. The majority of these farmers were aged between 36 and 45.
Cocoa prices in 2024
Cocoa futures have soared by over 80% year-to-date, with an additional 10% increase since October, as adverse climate conditions significantly disrupt the harvest season for the world’s leading producer.
- The international market price of cocoa has surged by 130% this year, reaching a peak of $9,900 per tonne. In January, the spot price rose from $4,297 to $4,841 by month’s end. February saw continued growth, closing at $6,443 and peaking at $6,866.
- By March, prices climbed to an impressive $9,828. The bullish trend persisted into April, setting a record high of $12,216. Currently, cocoa trades around $9,800, with projections indicating potential further increases.
- Nigeria’s cocoa earnings surged by 279% in the first quarter of 2024, driven by elevated cocoa prices. Data from the National Bureau of Statistics (NBS) shows that cocoa exports reached a value of N408.66 billion in the first three months of the year, up from N107.59 billion during the same period in 2023.
- Since then, the market has faced ongoing instability, with supply fears fueling continued volatility. Recently, heavy rains in Ivory Coast have renewed concerns by disrupting harvests, drying processes, and transportation, driving cocoa futures prices higher once again.