Nigeria’s Cocoa Export Rises
According to MIT’s Observatory of Economic Complexity (OEC), cocoa is among Nigeria’s top exports. Though it only represents 2% of the nation’s exports, the cocoa bean is the third largest export from Nigeria after crude petroleum and petroleum gas. Cocoa exports are a $740 Million USD industry in Nigeria. After a decrease in exports overall from 2011 to 2016, the nation has recently experienced growth and increase of the local cocoa crop. Nigeria is one of the top producers of cocoa in the region, after Ivory Coast and Ghana.
Last year, the President of the Cocoa Association of Nigeria (CAN), Sayina Ramina, predicted that cocoa production would likely exceed 300,000 tonnes in fall 2017. In recent years, cocoa production has fallen into steady decline with output close to 200,000 tonnes.
He attributed the increase in the cocoa crop to steady rains in the region. Ultimately the yield exceeded 300,000, proving ICCO’s (the International Cocoa Organization) predictions to be inaccurate. There are two cocoa production seasons in Nigeria, the primary season from October to February, and a lighter but productive yield from April to September.
Cocoa Production in Nigeria
In 2017, Nigeria exported over 300,000 tons of cocoa. In recent years, the Cocoa Association of Nigeria (CAN) has taken steps to improve the cocoa export and revive Nigeria’s agricultural sector. In the past year, cocoa production in Nigeria has increased by 20% from 2016 to 2017.
Despite being one of the top producers of cocoa in the world, many experts believe that Nigeria still isn’t producing to its full potential. The World Cocoa Foundation (WCF) funded a program with the partnership of several chocolate confectionary companies to assist farmers in getting the resources they need to maintain their farms. This assistance including training on better farming practices, educating farmers on pesticide application and providing training in other trades, such as soap making, to help farmers balance their income in the offseason.
Cocoa Processing and Cocoa Processing Plants in Nigeria
It’s important to note that unlike many countries, which export goods in a variety of formats, cocoa in Nigeria usually sells in its unprocessed state. Nigerian cocoa is most commonly exported as powder, raw cocoa beans, cocoa cake, and finally cocoa butter.
The unfortunate aspect of this fact is that most value of cocoa is found in its refined or processed state when it is used to make chocolate. Due to lack of infrastructure and cocoa processing facilities, farmers lose the opportunity to obtain maximum value for the product. The bulk of the cocoa’s value is recouped in Europe, where it is processed and sold as chocolate.
Today, Nigeria has a single processing plant, Ede Cocoa Processing plant, in Osun state. The factory produces a variety of cocoa products including cocoa powder, chocolate, cocoa butter, and cocoa cake. Even though a few factories remain in the region, they have produced less than 3,000 tonnes as of summer 2018, which is much lower than their factory’s capacity.
Although Nigeria and the African continent produces most of the world’s chocolate in its raw form, Nigerians still import the finished product. Experts hope that factories like Ede Cocoa Processing Plant will limit the need for importing chocolate and increase consumption of local products.
List of Cocoa Exporters in Nigeria
The International Cocoa Organization (ICCO) based in Ivory Coast maintains a directory of farmers, exporters, and other professionals related to the cocoa industry. Although Nigeria was a member in 2010, the country is not listed among the organization’s members in 2018.
Cocoa Exporters in Nigeria
The list of cocoa exporters in Nigeria include:
- FTN Cocoa Processors Plc
- Ideal Risku Global Limited
- Saro Agro-Allied
- Tosmega Cocoa Nigeria Limited
- Akeen and Kamoru Nigeria Ltd
- Berveek Limited
- Cocoa Products (Ile Oluji) Ltd
- Remedy Crown Investment
- Shinwillcrown Cocoa Producing Company
The list of cocoa bean exporters of bulk and wholesale cocoa beans from Nigeria include:
- Agro traders Ltd
- Crystal Green Ltd
- Gbemtan Investment Ltd
- Olatunde International Ltd
- Agebelere Cocoa Farm
- Okon & Sons Integrated Services Ltd
- Ose Global Bizness Links Nig. Ltd.
- Terry Cocoa Merchant
- Yinka Akintilo Enterprises Ltd
Nigeria Cocoa Export Data
By joining a cocoa trading association, you’ll have access to Nigerian cocoa export data. Independent bodies, such as the OECD also maintain specific data on countries. From time to time local news sources also report on Nigerian cocoa export data. The following are a few resources to obtain updated and accurate data on Nigeria cocoa exports:
- MIT’s OEC – The Massachusetts Institute of Technology Observatory of Economic Complexity maintains visual data representations of exports and imports as well as country’s profiles documenting each area’s most common imports and exports.
- ICCO – The ICCO, based in Ivory Coast, the world’s top cocoa exporting country, maintains detailed reports on the state of cocoa production throughout the world and in a list of select countries, including Nigeria.
- News about Nigeria Cocoa Trade (Scroll down the alphabetical list to find Nigeria)
Top Cocoa Import Countries
Nearly half of all Cocoa in Nigeria is exported to the Netherlands (45%). Germany and Malaysia are ranked second and third in cocoa imports from Nigeria, importing 22% and 6.2% of Nigeria’s cocoa output, respectively. Other top importers of Nigerian cocoa include Spain, Italy, Belgium-Luxembourg, and China. Nigerian cocoa and cocoa beans are usually exported in raw or unprocessed form to chocolate processing plants in these countries. The cocoa is typically exported to confectionary companies to make chocolate bars and other chocolate products, such as candy, cakes, and chocolate beverages.
The Price of Cocoa in Nigeria
Though cocoa production and exports have increased in Nigeria in recent years, many argue that this increase in price is due to the devaluation of the Nigerian Naira. In September 2018, One Nigerian Naira was worth just $.0028 US dollars. In a recent report on the state of cocoa in summer 2018, a local Nigerian farmer lamented the unfair pay for Nigerian farmers. He claimed that Nigerian farmers typically earn 650,000 to 680,000 Nigerian Naira ($1,788.61 to $1,871.16 USD) for one metric tonne of cocoa. This price is significantly less than cocoa prices as documented by ICCO (the International Cocoa Organization).
According to ICCO, which monitors daily prices of cocoa beans, the price of cocoa has decreased by over 10% from over $2,500 USD per tonne in March 2018 to less than $2,200 USD per tonne in September 2018. The daily cocoa price as listed by ICCO was listed as $2,173.97 USD per tonne on September 21, 2018. Monthly prices on the same day in the past six months were listed as follows:
Monthly Cocoa Prices
Average Price Per Tonne
$ 2,503.95 USD
In 2015, the Cocoa Association of Nigeria (CAN) partnered with ICCO to develop a Price Risk Management Strategy. The Nigerian cocoa trade has been subject to extremely volatile pricing, and when prices are unpredictable, it’s local farmers that bear the burden of the ebbs and flows of the local economy.
Indeed, international organizations have called on large cocoa processors and manufacturers that buy the unprocessed cocoa at a low rate to aid and maintain stability by providing support and training for programs that will stabilize the African cocoa economy.
Where to Sell Cocoa in Nigeria
There are a variety of ways that cocoa is exported from Nigeria. In some cases, one or even two middlemen are involved between the Nigerian farmers and cocoa exporters. The Nigerian trade begins with farmers working to harvest cocoa beans from the local crop. The following are ways in which cocoa beans are exported from Nigeria:
- Farmers to Small Buyers – Small buyers visit individual clients (farms) to purchase a share of the cocoa crop. In this method, small buyers may sell the crop directly to exporters, but more commonly the small buyers sell the cocoa to wholesale buyers who make the final sell to exporters.
- Farmers to Co-operatives – Farmer co-ops combine cocoa from several farms to sell to different agencies. The co-op purchases cocoa directly from farmers, and in some cases, sells it to exporters directly. In other cases, the co-op may also export the product directly.
Largest Cocoa Producing State in Nigeria
The largest cocoa producing state in Nigeria is Ondo. Other leading cocoa producing states include Ogun, Akwa Ibom, Edo, Ekiti, Osun. Together these states along with Ondo are responsible for 60% of the cocoa production in Nigeria. These regions are located in the southern part of Nigeria which produces ideal conditions for growing cocoa. The ideal location for growing cocoa around the world is within 20 degrees in either direction of the equator.
Issues Affecting Cocoa Export in Nigeria
Before you engage in the cocoa trade in Nigeria, it’s important to consider how to overcome common challenges affecting the cocoa trade and cocoa exporters in Africa. These concerns include everything from adequate production to transportation. Educating yourself on these issues may not eliminate the concern, but can help you determine a plan of action before engaging in trade.
- Roads and Transport – More than 30,000 tons of cocoa were found delayed in transit in the capital city of Lagos while en route to ports for export. Specifically, traffic, craters, and floods are to blame for the delay. This delay put strain on local businesses and some even sought loans to cover expenses while waiting for exports to be shipped and paid by buyers.
- Delays in cocoa production – For many years, Nigeria ranked fourth behind Ivory Coast, Ghana, and Indonesia in cocoa production, but a recent drop in production has lowered Nigeria’s position in the cocoa production chain to fifth, tied with Cameroon.
- Lack of support for farmers, including access to cocoa seedlings, price risk management, and pest control training are just a few factors that have led to a decrease in cocoa production. Many small farms harvest most cocoa in Nigeria throughout the southern region.
- Lack of farmers – Several news reports outline both the lack of younger farmers and the lack of interest of younger farmers in cocoa farming. This lack of interest has led to a decrease in the number of cocoa farmers. While there have been calls to stimulate the cocoa economy, the Nigerian cocoa production efforts faces significant challenges to its growth if enough young farmers don’t participate in the cocoa trade.
Resources for Cocoa Exporters
If you are considering exporting cocoa from Nigeria, it’s wise to join an association to stay abreast of developments, new regulations, and training opportunities. The following associations have supported the cocoa trade in Africa through producing research and statistics, reports and materials, and training programs.
- Cocoa Association of Nigeria (CAN) – https://www.cancocoa.org
- International Cocoa Organization (ICCO) – https://www.icco.org
- World Cocoa Foundation (WCF) – https://www.worldcocoafoundation.org
- Association of Nigerian Exporters – https://www.associationofnigerianexporters.org/