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Nigeria Cocoa Price Rises By 100 Percent
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The price of cocoa in Nigeria, the world’s fourth-largest producer of the beans, doubled in the main crop season as a result of increased demand and disruptions to supplies due to protests in Ivory Coast, the Cocoa Association of Nigeria (CAN) said yeaterday.

The association also stated that the depreciation of the naira had helped pushed up the price paid to farmers for the commodity.
According to Reuters, Neji Abang Neji, Secretary-General of CAN stated that farmers are now selling a metric tonne of cocoa for about N450, 000 ($2,988) up from N220, 000 a tonne a year ago.

“The improved quality of the beans being harvested means buyers are “competing” to get as much stock as possible to blend with the low-grade cocoa they are holding from the previous season,” Neji said. “Farmers are enjoying good prices now. Buyers are rushing to buy,” he added.
Nigeria ranks behind Ivory Coast, Ghana and Indonesia as the fourth-largest cocoa producer, according to the Web site of the International Cocoa Organisation. Farmers in Ivory Coast recently threatened to disrupt supplies in protest over low, fixed prices for the commodity. In Nigeria, coca prices are deregulated, allowing farmers to bargain with buyers.

The higher price farmers are being paid is being eroded by increases in the price of fertilizer and other raw materials, according to Akinwale Ojo, a former secretary of the cocoa association. “When you factor in the chemicals, transportation costs and higher jute bag costs, you end up having a little left,” he said yesterday.

While higher cocoa prices may be benefiting farmers, buyers are finding it difficult to get credit, Robo Adhuze, a consultant to the cocoa association, said. “They are now looking offshore for funds,” he said yesterday.

Nigeria’s crop this season may be smaller than last year because of the age of the country’s cocoa trees, Neji said. “Most of the farms are old and the trees are past their prime age,” he said. The farms need to be replanted with high- yielding, fast-maturing varieties, and farmers should learn to spray their trees correctly and use the prescribed fertilizers, he added.
David Onyenwaku, a cocoa farmer, said output will improve if the government supplies chemicals that will allow farmers to spray their trees through October and not only the first week of the month. “We stopped spraying on October 5, and since then the trees have not performed well,” Onyenwaku said.

Meanwhile, notable cocoa processing companies in Nigeria are planning a mass exodus of their factories to neighboring West African nations THISDAY learnt.
A source close to the Cocoa Processors Association of Nigeria (COPAN) told THISDAY that the processors that are leading the way in the mass relocation of factories are mostly the ones which have a large percentage of foreign ownership.

THISDAY gathered that the reason why the cocoa processors with foreign origin no longer find Nigeria attractive include the familiar dilapidated infrastructure and the penalty imposed on cocoa products from Nigeria in the international market because Nigeria has refused to endorse the interim Economic Partnership Agreement (EPA), which countries like Cote d’ Ivoire and Ghana have signed. This penalty, the source said makes products from Nigeria more expensive than products from neighbouring countries.

Another reason why the companies have decided to move their production base from Nigeria THISDAY learnt, is the delay and sometime outright denial of cocoa processing companies the Export Expansion Grant (EEG) by the Federal Government.

The EEG, the source said, is virtually the only reason why it still makes rational economic sense to produce cocoa products such as liquor, butter and cake in Nigeria and if it is delayed for years or out rightly denied processors of the produce then their business, which basically depend on the export market is practically dead.

Source: Thisday Online

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