Cameroon and Nigeria have all drawn inspiration from top cocoa growers, Ivory Coast and Ghana to seek ways of jointly negotiating with cocoa buyers for a better premium. Nigeria which is the world’s fourth largest producer is part of the plan by West African and Latin Latin America n growers to try to address a perceived imbalance between Farmers incomes and money made by big commodity traders.
Ghana and Ivory Coast accounts for nearly two thirds of global output, have imposed a fixed “living income differential” of 400 USD a ton on all cocoa contracts sold by either country for the 2020/2021 season.
World Cocoa Producers Organization Vice-President Sayina Riman, who is also the President of the Cocoa Association in Nigeria, said Ivory Coast and Ghana have firmly agreed a 400 USD per ton premium above global for their cocoa and wanted that Nigeria follow suit to protect the its farmers.
Knowing already that Ghana and Ivory Coast account for two thirds of the worlds cocoa production, it is worth noting that Nigeria and Cameroon account for 10% of global production and have the potential to double the output within five years, says Riman. The countries share the same border and a similar weather. He also added that Nigeria has had informal discussions with Cameroon.
“We are talking to Cameroon to see if we can become a regional bloc… and see if we can get our buyers who know our quality to give us differentials” he said in a telephone interview, according to AfricaNews.com. “We need to approach as a bilateral discussion” he added.
Peru has said it would propose a minimum price of $3,200 per ton to its regional growers, which together makes up 17% of the global output, after the move by West African producers.
Riman said private representatives in Nigeria would hold talks with the government this month to map out a plan after which the country will fully engage Cameroon.
He said Nigerian officials had also met with British and Dutch officials about boasting cocoa exports to Europe rather selling beans through third party buyers in Asia. Cameroons trade ministry is unaware of the Nigerian plans, said its spokes man, Serge Eric Epoune , while a source at the country’s National Office Cocoa, who did not want to be named said all were just rumors.
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Can Nigeria and Cameroon pull through this deal?
A top cocoa trader at one of the world’s biggest agricultural houses did not see how Nigeria and Cameroon could team up, because Nigeria does not have the central cocoa authority, unlike Cameroon, Ivory Coast and Ghana.
“If Nigeria and Cameroon prices will move up in line with Ghana and Ivory Coast because of the demand and supply “said the trader. “if Nigeria becomes too cheap, people will buy Nigeria and the market will adjust higher automatically, but not because they teaming up” added the trader.
Farm gate prizes rose to around N720, 000 ($2,353) per ton from N650, 000 September. There are fears that weather outlook could dampen output. Nigerian production for 2019/20 could dip about 3-5% to around 305, 000 tons due excessive rainfall, Riman said, estimating 2018/19 output of 310,000 tonnes. The International Cocoa Organization (ICCO) puts the 2018/19 forecast at 250, 000 tons.
