Nigeria Fails to Capitalize on Global Deficit, as Cocoa Production Falls in 2022

Brazilian cocoa farmers are asking the local government to stop the flow of imported cocoa from Ivory Coast, the fifth world’s largest producer of chocolate, saying those imports bring risks to the health of Brazilian plantations. 

Brazil’s ANPC, an association representing cocoa farmers, said it will try to block or make transportation difficult of a cargo of cocoa from the Ivory Coast that is expected to arrive in the Brazilian state of Bahia this weekend, aboard the vessel Pichon. 

Brazil, the world’s fifth largest chocolate maker, needs to import part of the cocoa that it processes as local production, despite a recovery in recent years, which is not enough to supply the industry. The country usually imports between 20% to 35% of the cocoa it grinds, and Ivory Coast is the world's largest supplier, responsible for nearly 45% of the world’s cocoa supply. AIPC, an association gathering cocoa processors in Brazil such as Cargill, Olam, and Barry Callebaut, disagrees with farmers, saying that Brazil’s agriculture ministry has cleared Ivorian cocoa of any problems. 

“The imported cocoa has already been through some post-harvesting processing such as drying and fermentation, which eliminates nearly any plague,” said AIPC head Anna Paula Losi. She said the local industry supports the idea of self-sufficiency for Brazil but said that imports are needed until the country gets to that point. Brazil was a large cocoa producer in the past, but a fungus disease known as Witches Broom decimated fields in the 1980s. Nowadays, the country accounts for around 5% of global production.  

Whether or not Ivory Coast’s beans are diseased is still up for debate. What isn’t is that production in the country has fallen to record lows. A February Reuters report states that the country's farmers are close to defaulting on their export contracts and will need as much as 150,000 tonnes to honor their commitments.  

The cocoa crop is one which requires heavy rainfall, and the West African region has experienced a more severe dry season than normal, affecting harvests. Another issue is the scarcity and increased price of fertilizers, with the Russia-Ukraine war limiting supply from the world’s leading source of potash and local farmers bemoaning the reduced natural fertility of the soil.  

The Ivorien crisis has seen cocoa prices around the world soar. Cocoa commodity prices have risen on both the New York and London stock exchanges. The question is if other African countries can boost their production to offset Ivory Coast’s shortages. Four of the world’s five largest cocoa exporting countries are African, with Ghana, Nigeria, and Cameroon making up the list, along with South America’s Ecuador.  

Ghana is responsible for 16.24% of global exports in 2021, according to Tridge, with both Nigeria and Cameroon providing a little of 6% each. The issue is that these countries lie in the same climactic zone as the Ivory Coast and thus experience similar problems with reduced rainfall. Nigeria, in particular, saw its production output drop by 12.01% between 2021 and 2022, a loss of 41.7 thousand tonnes. Most cocoa farming in Nigeria is carried out by smallholder farmers: 39.03% of all farmers use two hectares or less; a further 33.3% work on two to five hectares. A cash crisis in the country has seen farmers suspend operations, as farmers have reported an inability to pay workers and transporters.  

The government-owned and controlled Ghana Cocoa Board, COCOBOD, which maintains a monopoly over the country’s output has reported issues with mining. The board reports that illegal gold mining activities are destroying farmlands in Ghana’s Western South, Ashanti, and Eastern regions, costing nearly US$376.5 million in losses. Legal mining is also an issue, as mining companies, upon receipt of concessions from the government would often purchase farmland, which is immediately turned into mines.  

Overall, the cocoa supply fell globally in 2022. Diseased yields, unfavorable weather, and economic crisis in major producing countries contributed to an 8.0% decline year-on-year from 2021. This was after 2021 saw global cocoa production post record figures, reporting a 209,000-tonne surplus, according to Barchart. However, reduced global demand has kept prices low. With all the major producing countries forecasting increased outputs in 2023, it remains to be seen if demand and prices will rise in turn.