Caterpillar infestation hitting Cote d’Ivoire Cocoa farms may boost Nigeria’s export
Serious threat of yield collapse is currently hitting Cote d’Ivoiren Cocoa farms following the confirmed infestation of Caterpillar insects attacks within the largest Cocoa farming region of the country.
This is coming at a time Ghanaian government is seeking approval from the World Bank for multibillion dollar grant to deepen Cocoa production.
Explaining the scenario on how it will affect the ailing Nigerian Cocoa productivity, Research Analyst at Financial Derivatives Company, Ms. Temitope Olugbile said in an interview that “Bearing in mind that Cote d’Ivoire is the largest producer of Cocoa globally and produces about 2.1 million tones which is like 45% of global output, currently, its output is being threatened by caterpillar infestation and with the coming wet season, the risk of this infestation spreading and reducing their output is very high”.
She said “if output of such a price determining like Ivory Coast drops and supply dynamics insists that prices will spike and we have already started saying that the prices of Cocoa increased by 2,770 dollars per metric tonnes which is a year on year increase of 43%, sales and export from Nigeria will rise”.
“And so, in the coming month, we expect the prices would increase, output would first drop and then prices will increase.
Bearing in mind that Nigeria ranks the sixth largest producer of Cocoa in the world and the fourth largest in sub-Saharan Africa, Olugbile revealed that the reduced supply from Ivory Coast means chances for growth in Nigeria’s export earnings if the sub sector is in good shape.
Business Hilights recalls that Nigeria currently produces about 205,000 tonnes of cocoa which is about 4.5% of the global output and out of this output, 80% of it is exported as Cocoa beans which earns us about N14.5 billion as at Q4 2017.
She argued that “The increase in global prices coming from the drop in Ivory Coast production is good news for Nigeria export earnings and would increase our revenues and increase our foreign exchange liquidity”.
“However, Nigeria has the potentials to produce over 500,000 tonnes of Cocoa, so that means that we are currently producing half of what our potential is. And so, in order to key into the opportunity for increase in earnings from the increase of price in Cocoa, it is important for the government to increase the farmer’s access to seedlings, improved technology and funding in order to tap into the increasing price environment.
