NIGERIA – A Financial Derivatives Company’s (FDC’s) commodity updated has projected an increase in coca prices at the international market due to persisting poor weather conditions in the major producing countries.
According to the Daily Independent, FDC analysts said that although cocoa prices were down by 2.86% to $2,274 per metric ton in the past few weeks, prolonged worsening weather in Ivory Coast, the major producing country, could affect prices.
International cocoa traders also backed the forecasts reiterating that increase in prices should be expected as any drop in production in Ivory Coast, will affect some other producers thereby causing speculative demand for the limited available cocoa.
According to the analysts, the conditions will also affect production capacity in Ghana, Nigeria and Cameroon exerting a downward pressure which will subsequently increase the demand of despite the current limited supply of the commodity.
“That will now make the price to go up because the demand is still there but supply is low. So, the only thing that will balance it is the pricing,” said Oba Dokun Thompson.
He added that production has declined by about 30000 metric tonnes amid all the harvests for the main crop which last year and the current light crop season in Nigeria.
“If you look at the International Cocoa Organisation (ICCO) figure, the total output for Nigeria has dropped with about 20,000 to 30,000 metric tonnes, and that was in November 2017; in the year between 2017 and 2018 we lost a bit so, unfortunately that affected us generally as well,” he said.
Sayina Riman, National President Cocoa Association of Nigeria (CAN), stated that stakeholders in the cocoa industry are not only looking at increase in price, but also the implication on high cocoa consumption in Nigeria that will subsequently send pricing good enough for the farmers to benefit from.
However he raised concern over the persistence of dry spell which has taken over major cocoa farms in the country, as he called on the Federal Government to make available at a subsidised rate for fertilizer to combat the challenge so as to get a better yield.
He said that Nigerian farmers are currently experiencing dry spell which started since December last year and appealed to the federal government for subsidies in inputs in a bid to augment intervention on the situation.