Nigeria Cocoa Exports Jumps By 300% From ₦‎161.8 Billion To ₦‎644 Billion

The Nigerian cocoa industry has experienced a recent surge in demand and profitability, with data indicating that the country’s annual cocoa volume of 250,000 tonnes is now valued at over $6 billion.

Adding to the cocoa industry’s sweet success, Nigerian cocoa farmers and exporters had a bountiful first half of 2024, earning an estimated N644 billion from the export of cocoa beans, according to data from the National Bureau of Statistics (NBS).

Nigeria’s cocoa exports saw a 298 percent growth in the first half of 2024, reaching N644 billion compared to N161.8 billion in the same period of 2023.

The surge in exports has been attributed to an increase in the price of the key ingredient in chocolate production. Prices have more than tripled since the start of the year, with a new historic high of $8,246 per tonne recorded on November 27, as reported by the International Cocoa Organisation (ICCO).

Poor weather conditions in the world’s top cocoa-producing nations, Ivory Coast and Ghana, have wreaked havoc on harvests, causing a shortage in cocoa supply.

However, in a silver lining moment for Nigerian farmers, their cocoa exports skyrocketed due to the devaluation of the Naira, which fell to as low as N1,675 against the US dollar, as reported by FMDQ. This devaluation made Nigerian cocoa exports relatively cheaper, giving farmers a lucrative edge in a cocoa market struck by scarcity.

Although the global cocoa market is currently riding a sweet wave for Nigerian farmers with prices reaching around $10,000 per tonne, the potential for Nigeria to benefit is not fully realised, as the country continues to be a minor player in the global cocoa arena. Despite once being the second-largest producer of the commodity, Nigeria has slipped to the sixth spot in the world rankings and currently contributes just five percent of the global cocoa supply.

Despite Nigeria’s diminished prominence in the cocoa production landscape, cocoa industry stakeholders continue to champion the pivotal role of cocoa in Nigeria’s economic diversification strategy.

This message was front and center at the 25th Anniversary and Awards Ceremony of Starlink Global & Ideal Ltd., a Lagos-based agricultural marketing company that specializes in the export of cocoa, cashew, sesame seeds, and other key agricultural products.

According to Adeyemi Adeniji, chief executive officer of Starlink, the cocoa industry holds the key to unlocking substantial economic growth for Nigeria.

Highlighting the significant potential of the cocoa sector, Adeniji urged the government to implement policies that encourage industrialisation via backward integration, enabling the country to capitalise on the cocoa value chain and enhance the sector’s impact on the Nigerian economy.

“The cocoa market, in terms of volume, is just about 250,000 tons, but in terms of value, it is about $6 billion or more, depending on the international market price.”

“Today, the price of cocoa has risen to $10,000 per tonne. This means Nigeria’s cocoa exports could generate $25 billion, underscoring the potential of the sector,” he noted.

Adeniji also disclosed that the company has collaborated with Odu’a Investment to manage 25,000 hectares of farmland across West Africa, in a visionary partnership aimed at unlocking the potential of agriculture in the region.

As part of this partnership, two pilot sites spanning 5,000 hectares each will be developed in the near term, with plans for further expansion over the next five years. Furthermore, Starlink has acquired Nigeria’s largest cocoa processing facility, which is slated to begin operations by April 2025.

Adeniji explained that with the acquisition of this state-of-the-art cocoa processing facility, Starlink is positioning itself to drive the cocoa value chain forward by producing finished products such as chocolate and cocoa drinks.

Also speaking at the event, Bimbo Ashiru, chairman of Odu’a Investment Group, underscored the need to diversify Nigeria’s economy away from its reliance on oil and toward agriculture as a core driver of growth.

Ashiru stressed the government’s commitment to making Nigeria a more attractive destination for investors, citing the minister of trade and investment’s efforts to improve the ease of doing business and attract more investment. The ultimate goal, he noted, is to generate more than a trillion dollars annually from agriculture.

Expanding on the government’s vision for the agricultural sector, Ashiru also detailed plans to establish an agro-industrial hub in the Southwest, with a focus on high-value cash crops such as cashew and cocoa.

The primary objective of the hub, he noted, is to create a value chain that will facilitate the production of raw materials and finished goods.

“The strategy is to make Nigeria non-oil dependent. We have so much in agriculture that leads to industrialisation. We have no business being an import-dependent economy. We should be exporting more, and the strategy is over a trillion dollars a year so that once we have that, we’ll be less dependent on oil.

“The point is this: as a country, Nigeria was the second largest exporter of cocoa in the world in the 70s. We went wrong when we found oil. But now we should go back to that basis and start doing that, and that is the focus, and that’s what we are looking at now in Nigeria,” the Odu’a Investment Group chairman stated.

The ongoing surge in global cocoa prices, coupled with investments in infrastructure and policy support, positions Nigeria as a key player in the global cocoa market. Stakeholders believe that tapping into agriculture’s full potential will not only diversify Nigeria’s economy but also strengthen the naira through increased foreign exchange earnings.

The Cocoa Farmers Association of Nigeria (CFAN) and other key stakeholders have also underscored the need for cooperation and collaboration in the country’s cocoa sector.

At the recent Calabar 2024 cocoa event in Cross River State, over 300 participants, primarily cocoa stakeholders from Nigeria’s cocoa-producing states, converged to identify the critical challenges confronting Nigeria’s cocoa industry.

Three key issues were identified as hindering the development and sustainability of the industry: low local consumption of cocoa products, inaccurate data on cocoa production and value chain, and inadequate knowledge among farmers about the European Union Delegated Regulation (EUDR), which outlines regulations related to cocoa cultivation, processing, and trade.

In a bid to safeguard the longevity and competitiveness of the cocoa industry, stakeholders at the event recognised the need to engage the youth in cocoa farming and processing through entrepreneurial endeavors.

They also committed to tackling the key issues confronting cocoa farmers in Nigeria, such as soil degradation, pest and disease infestations, the improper use of adulterated agrochemicals, inadequate access to cocoa policy documents, and the need for updated land use and forest cover maps.

The event opened the door to a broader conversation about the cocoa industry in Nigeria, further highlighting the many challenges confronting farmers. These challenges include limited land tenure systems, weak collaboration among industry players, low adoption rates of traceability systems, outdated farming techniques, inadequate access to high-quality inputs, adverse effects of climate change, under-utilisation of mitigation techniques on farms, and insufficient investment in agricultural technology and innovation.

In light of these hurdles, the stakeholders at the Calabar 2024 event proposed a shift towards increasing local processing and consumption of cocoa products as a strategy to strengthen the industry.

The stakeholders at the Calabar event urged the government and the Nigerian Cocoa Marketing Company (NCMC) to take the lead in standardising and updating available data on the cocoa value chain.

Furthermore, they advocated for awareness campaigns to educate all stakeholders in the cocoa value chain about the EUDR and other relevant regulations, ensuring a thorough understanding of the regulations and their implications for the industry.

Adeola Adegoke, president of the Cocoa Farmers Association of Nigeria (CFAN), proposed that the government should conduct a comprehensive review of the current land tenure system. This review, he explained, could potentially address land access and ownership challenges faced by cocoa farmers.

Moreover, Adegoke suggested that a national traceability system should be established, in collaboration with both development partners and industry experts, to enhance transparency and accountability in the cocoa industry.

In line with his call for government action, Adegoke underscored the significance of increased investment in research institutes with a focus on developing climate-smart agricultural practices for farmers.

The CFAN president also called for a conducive environment to be fostered that facilitates private sector and youth involvement in the cocoa value chain, thereby encouraging long-term sustainability and growth in the sector.