How Nigeria can tap into cocoa price surge

Cocoa prices are on the rise, driven by global demand and production shortfalls in key cocoa-producing countries like Cote d'Ivoire and Ghana. Tedd George, Chief Narrative Officer at Kleos Advisory, recently discussed how exporters like Nigeria can capitalize on the cocoa price surge in an interview on CNBC Africa. George highlighted the challenges and opportunities faced by Nigeria in the current cocoa market. During the interview, George reflected on his recent trip to Nigeria for the Global Trade Review and the positive attitude towards business and trade that he experienced in Lagos. Despite the welcoming atmosphere, he pointed out critical issues such as the need for better collaboration and the impact of climate change on cash crops like cocoa. The conversation delved into the challenges posed by climate change and unsustainable production practices, leading to production shortfalls and surging cocoa prices. One of the key points raised was Nigeria's struggle with climate-related issues, particularly flooding that could affect a significant portion of cocoa plantations in the country. This poses a threat to both farmers' livelihoods and export volumes. With cocoa prices currently at record highs, exporters stand to benefit, but the overall production challenges in Nigeria may hinder widespread gains. George emphasized the importance of adapting to changing weather patterns and implementing innovative solutions such as AI-powered crop breeding and better weather forecasting to mitigate risks in the agriculture sector. As discussions turned to the top cocoa producers, Cote d'Ivoire and Ghana, George disputed the notion that production shortfalls were short-term issues, attributing them to climate change and unsustainable farming practices. The interview also touched on farm gate prices and the dynamics of cocoa pricing, with George highlighting the disparity between local prices and international benchmarks. While countries like Ghana and Cote d'Ivoire are implementing price hikes to incentivize production, the focus remains on whether these increases will benefit small-scale farmers or primarily serve foreign exporters. Looking ahead, concerns were raised about the potential impact of current production shortfalls on future cocoa seasons. The need for financing and strategic planning to address these challenges was underscored, as stakeholders navigate a volatile market with uncertain supply outlooks. George acknowledged the possibility of cocoa prices surpassing $11,000 per tonne and beyond, but cautioned against a sustained upward trend, citing potential shifts in consumer demand and product availability. In conclusion, the interview highlighted the complex landscape of the cocoa market, with Nigeria facing both opportunities and obstacles in leveraging the price surge. As exporters tread carefully amidst production uncertainties and market fluctuations, strategic planning and innovation will be crucial in ensuring long-term sustainability and competitiveness in the cocoa industry.