Nigeria Aims to Capitalize on Rising Cocoa Prices and Expand Production

Nigeria is looking to expand its cocoa production in response to soaring prices, aiming to compete with leading producers Ivory Coast and Ghana, who have faced significant challenges. The government has set a target of 500,000 tonnes for the 2024-2025 season, while local investments are increasing. However, potential environmental risks and the dominance of smallholder farmers pose challenges for sustainable growth in the cocoa sector.

The rising cocoa prices are prompting Nigeria to increase its involvement in the cocoa sector, aiming to compete with leading producers, Ivory Coast and Ghana. These countries have faced challenges from climate change and crop diseases. The price of cocoa beans reached a record high of $12,000 per tonne in December, stimulating investor interest in Nigeria’s cocoa industry, traditionally tied to oil.

Local companies are actively pursuing opportunities in cocoa production this year. The UK’s development financing agency recently invested $40.5 million in Johnvents, a Nigerian agribusiness. As the seventh largest cocoa producer globally, Nigeria produced over 280,000 tonnes in 2023 and has set an ambitious target of 500,000 tonnes for the 2024-2025 season.

Despite skepticism about achieving the production target this season, there is optimism regarding the rehabilitation of existing cocoa farms and the establishment of new plantations in the coming years. Nigerian farmers face greater exposure to global price fluctuations compared to their Ivorian and Ghanaian counterparts due to price regulations in those countries.

While cocoa futures have decreased from their peak, prices remain elevated over $8,000 per tonne compared to the previous range of $2,000 to $3,000. The increasing interest in cocoa production at various levels indicates a collective effort to benefit from current prices. Ivorial Coast leads global production with over two million tonnes, with Ghana following at 650,000 tonnes, both having suffered from poor harvests due to adverse weather.

Although Nigeria’s cocoa plants have been less affected by climate change, expanding cocoa cultivation presents potential environmental risks. The establishment of the National Cocoa Management Committee aims to regulate the cocoa industry and support farmers. However, the promotion of monocrop plantations focusing solely on cocoa cultivation may raise sustainability concerns, as opposed to growing cocoa alongside other trees that enhance biodiversity.

Expansion in the sector is complicated, primarily due to the reliance on smallholder farmers, who often lack the resources to grow their operations. A farmer in Ogun State expressed the challenges of insufficient capital and land access for expansion. However, industry leaders suggest that Nigeria’s cocoa production exceeds Ghana’s in land area and argue for a comprehensive approach involving seed provision and sustainable agricultural training for farmers to restore Nigeria’s cocoa leadership position.

In summary, Nigeria is actively pursuing growth in its cocoa sector, aiming to boost production and compete with top producers like Ivory Coast and Ghana, despite challenges posed by smallholder farming and sustainability concerns. While rising global cocoa prices provide an opportunity, the focus on sustainable farming practices and comprehensive support for farmers will be essential for achieving long-term goals and enhancing Nigeria’s position in the global market.

Original Source: www.hindustantimes.com