Nigeria’s cocoa farmers are battling challenges to make profits despite spiking prices and for now, cocoa prices have risen marginally and remained stable since October.
According to Trading Economics, a research site, noted that cocoa has traded at $2,520 per metric tonne since the beginning of this year. In September, graded cocoa certified fit for export traded between $2,892 and $3,008, following high rain in places such as Ondo State. This notwithstanding, farmers also took advantage of sufficient sunshine to dry the beans fairly well.
At a time last month, New York cocoa futures recorded $2,600 per tonne, while London cocoa futures recorded 1,857 pounds ($2,264).
President, Federation of Agricultural Commodities Association of Nigeria(FACAN),Dr Victor Iyama explained that higher production in cocoa don’t often lead to higher prices for local farmers ,adding that the major chocolate producers determine how much they get at the end of the day despite the prices published on the various commodities exchange.
In October, last year, Nigerian beans exported to the U.S recorded a 40 per cent reduction from $407 to $244 per tonne in the origin differential.
Iyama noted that there have also been situations where the international markets face the problem of oversupply, adding that cocoa prices have come under pressure amid fluctuation in demand around the world.
Last year, ICCO noted in February that anticipations of a production surplus compounded with low levels of demand will drive down cocoa prices on the London and New York futures markets.
According to Iyama, prices declined as a result of excess supply despite the year-on-year increase in grindings.
There were concerns that the sub region will record lower cocoa production due to a lack of fertilizer.
ICCO said the shortage of fertilizer on cocoa farms would likely hurt cocoa bean crop quantity, quality, and size next year – and that weather conditions and disease are negatively affecting cocoa production this year.
There has been an increasing campaign to improve farmer pay, in Nigeria, Ivory Coast and Ghana which together account for more than 50 per cent of the world’s output. Iyama explained that lower cocoa prices exacerbate poverty. To avoid these, Nigeria, Ivory Coast and Ghana introduced a $400 per tonne Living Income Differential (LID) to protect farmers from price decreases and secure a higher income for farmers.
Credit: thenationonlineng.net
