Cocoa price surge: How can Nigeria cash in?

Nigeria's cocoa exports have surged by 24 per cent to 27,564 Metric Tons in the month of March, defying supply chain disruptions and climate-related challenges in West Africa. This growth comes at a time when cocoa bean prices are on the rise, presenting Nigeria with an opportunity to capitalize on the market dynamics. Akin Laoye, the CEO of FTN Cocoa Processes, sheds light on the factors behind this growth and the necessary reforms for Nigeria to maximize its cocoa industry's potential. One key driver of the export growth, according to Laoye, is the undersupply of cocoa in the market, especially during the light crop season. This undersupply has led to a surge in prices as market forces come into play. Despite the challenges faced due to supply chain disruptions and climate issues, Nigeria is managing to increase its cocoa exports, showcasing the potential for further growth. To fully benefit from the current high cocoa prices, Laoye emphasizes the need for government intervention and policy reforms. He stresses the importance of a strategic approach, urging the government to take deliberate actions to support and regulate the cocoa industry. Laoye advocates for policies that allocate specific land acreages for cocoa production, encourage new entrepreneurs to enter the sector, provide necessary inputs and funding, and ensure sustainable growth practices. Laoye also addresses the challenges faced by processors in the cocoa industry, highlighting the volatility in prices and supply disruptions that impact profitability. He emphasizes the need for infrastructure development, adequate funding, and reliable power sources to sustain cocoa processing operations. Laoye calls for a collaborative effort between the government and industry stakeholders to address these challenges effectively. In response to external factors such as US tariffs and the proposal of cocoa cartels by Ghana and Côte d'Ivoire, Laoye suggests regional collaboration as a strategic approach for Nigeria. By working together with neighboring countries in West Africa, Nigeria can influence global pricing dynamics and enhance the value of its cocoa exports. Laoye underscores the importance of adding value to cocoa products to extend shelf life and improve market negotiation leverage. As Nigeria's cocoa industry continues to show promise amidst challenges, the key to sustained growth lies in strategic government policies, industry collaboration, and investment in infrastructure and sustainability. With the right reforms and a concerted effort from all stakeholders, Nigeria can solidify its position as a significant player in the global cocoa market.