Post by Trade Coach on Apr 15, 2018 21:52:03 GMT 1
Trading in cocoa is a multimillion naira business. It is a major commodity in the booming worldwide trade and has shown how an export-led growth can be a powerful antidote to rural poverty.
Even with the millions of naira spent by big time merchants yearly, the industry still accommodates thousands of small-scale farmers. The growth of the industry has been so successful that more Nigerians are going into the sector. Majority of cocoa production worldwide is by smallholder farmers. Unlike coffee, cocoa has not been a source of wealth creation for farmers. Cocoa is typically a cash crop for subsistence farmers who cultivate relatively small plots of cocoa alongside other food staples grown for their own consumption.
The industry has enabled local companies to sell ever-increasing volumes of cocoa produce. Some small scale firms have taken their place at the heart of an industry that has gained international recognition, notably for the quality assurance required of the produces. The business is worth more than N1billion yearly.
An agro-industry specialist, Mejabi Ekundayo, once said the cocoa industry provides opportunities for an increasing number of households in a variety of sustainable activities that generate auxiliary incomes.
The success brought government attention and the critical decision that the public authorities would support the industry's growth.
He has been involved in the World Cocoa Foundation (WCF) sponsored programmes in the cocoa industry and seen the sector has grown to include new farmers and areas, partners.
Ekundayo has trained and worked with some players from Ondo, Cross River, Osun and Edo states. Working with other consultants, they have provided decent livelihoods for many farmers.
International trade consultant, Alhaji Ali Jegede also has said there are opportunities for small and medium enterprises to invest in the industry, and encouraged other investors to back the industry.
He said small investors can start with N3.5 million and can turn over the money a month. They don't need to start as merchants. They come into the business local buying agents (LBA) liaising directly with the farmers. They will buy the produce and sell them to export merchants. What they need is sufficient understanding of the markets, logistical issues; and technical challenges related to the introduction of new varieties.
Over time, knowledge, network and access to expertise, will deepen understanding of how to sell into complex and increasingly competitive markets and to learn from the experiences of their counterparts.
He said young Nigerians can act as local buying agents connecting farmers in the plantations. Cocoa is grown by many small scale farmers (two hectares or less). As new entrants, the challenge is finding ways to move significantly into the markets.
For him, the number of small scale enterprises involved in the sector is a success story for poverty reduction, with thousands of Nigerians now gaining a decent livelihood where previously they had none.
From grassroots beginnings, the farmers are linked with the international market. A combination of entrepreneurial spirit, close attention to quality through the supply chain, and a willingness to embrace foreign partners, have seen the industry thrive.
He said cocoa business in areas with favourable climatic and soil conditions mean big money even for small buyers. They sell their cocoa through private, free enterprise channels into the world market. He said the industry provides an opportunity for rural traders, business people and domestic food processors to participate in the global cocoa trade, which exceeds $6 billion qyearly.
His advice is to focus on cocoa quality. Jegede is involved in the export of cocoa and cashew. Once the local buyers can make good purchase during harvest, they can anticipate good earnings per year. With this, their family will enjoy increased financial stability.
He believes in training designed to help the farmers share experiences and business opportunities with one another. After some time, the volume will increase.
Faseru said prices mostly reflect weather condition. He cited job creation and economic transformation inherent in agriculture, particularly with cottage industries and agro-processing firms that are operated.
Most local buying agents work with Olam International, a Singaporean company, involved in processing of agricultural products and food ingredients. A lot of Nigerians have become familiar with international standards demanded by the company from local buying agents. Olam buys from agents in countries, such as Nigeria and Ivory Coast.
The company has established cocoa bean quality standards and provided monitoring and training assistance to ensure farmers meet and maintain a level of cocoa bean quality that is required by the global market.
Few years years ago, earnings by cocoa farmers in the country rose tremendously. The farmgate price was N535,000 ($3, 490) per metric ton - an all-time high, up from about N460,000 a month ago, according to Neji Abang Neji, Secretary-General of the Nigerian Cocoa Association.
Nigeria ranks behind Ivory Coast, Ghana and Indonesia in cocoa production, according to the International Cocoa Organisation. Increase in the price of cocoa was largely driven by speculations in the global market, events in Cote d'Ivoire, and the unregulated cocoa market structure in the country. Prices were as low as N400,000 before the Cote D'Ivoire political crisis.
Even with the millions of naira spent by big time merchants yearly, the industry still accommodates thousands of small-scale farmers. The growth of the industry has been so successful that more Nigerians are going into the sector. Majority of cocoa production worldwide is by smallholder farmers. Unlike coffee, cocoa has not been a source of wealth creation for farmers. Cocoa is typically a cash crop for subsistence farmers who cultivate relatively small plots of cocoa alongside other food staples grown for their own consumption.
The industry has enabled local companies to sell ever-increasing volumes of cocoa produce. Some small scale firms have taken their place at the heart of an industry that has gained international recognition, notably for the quality assurance required of the produces. The business is worth more than N1billion yearly.
An agro-industry specialist, Mejabi Ekundayo, once said the cocoa industry provides opportunities for an increasing number of households in a variety of sustainable activities that generate auxiliary incomes.
The success brought government attention and the critical decision that the public authorities would support the industry's growth.
He has been involved in the World Cocoa Foundation (WCF) sponsored programmes in the cocoa industry and seen the sector has grown to include new farmers and areas, partners.
Ekundayo has trained and worked with some players from Ondo, Cross River, Osun and Edo states. Working with other consultants, they have provided decent livelihoods for many farmers.
International trade consultant, Alhaji Ali Jegede also has said there are opportunities for small and medium enterprises to invest in the industry, and encouraged other investors to back the industry.
He said small investors can start with N3.5 million and can turn over the money a month. They don't need to start as merchants. They come into the business local buying agents (LBA) liaising directly with the farmers. They will buy the produce and sell them to export merchants. What they need is sufficient understanding of the markets, logistical issues; and technical challenges related to the introduction of new varieties.
Over time, knowledge, network and access to expertise, will deepen understanding of how to sell into complex and increasingly competitive markets and to learn from the experiences of their counterparts.
He said young Nigerians can act as local buying agents connecting farmers in the plantations. Cocoa is grown by many small scale farmers (two hectares or less). As new entrants, the challenge is finding ways to move significantly into the markets.
For him, the number of small scale enterprises involved in the sector is a success story for poverty reduction, with thousands of Nigerians now gaining a decent livelihood where previously they had none.
From grassroots beginnings, the farmers are linked with the international market. A combination of entrepreneurial spirit, close attention to quality through the supply chain, and a willingness to embrace foreign partners, have seen the industry thrive.
He said cocoa business in areas with favourable climatic and soil conditions mean big money even for small buyers. They sell their cocoa through private, free enterprise channels into the world market. He said the industry provides an opportunity for rural traders, business people and domestic food processors to participate in the global cocoa trade, which exceeds $6 billion qyearly.
His advice is to focus on cocoa quality. Jegede is involved in the export of cocoa and cashew. Once the local buyers can make good purchase during harvest, they can anticipate good earnings per year. With this, their family will enjoy increased financial stability.
He believes in training designed to help the farmers share experiences and business opportunities with one another. After some time, the volume will increase.
Faseru said prices mostly reflect weather condition. He cited job creation and economic transformation inherent in agriculture, particularly with cottage industries and agro-processing firms that are operated.
Most local buying agents work with Olam International, a Singaporean company, involved in processing of agricultural products and food ingredients. A lot of Nigerians have become familiar with international standards demanded by the company from local buying agents. Olam buys from agents in countries, such as Nigeria and Ivory Coast.
The company has established cocoa bean quality standards and provided monitoring and training assistance to ensure farmers meet and maintain a level of cocoa bean quality that is required by the global market.
Few years years ago, earnings by cocoa farmers in the country rose tremendously. The farmgate price was N535,000 ($3, 490) per metric ton - an all-time high, up from about N460,000 a month ago, according to Neji Abang Neji, Secretary-General of the Nigerian Cocoa Association.
Nigeria ranks behind Ivory Coast, Ghana and Indonesia in cocoa production, according to the International Cocoa Organisation. Increase in the price of cocoa was largely driven by speculations in the global market, events in Cote d'Ivoire, and the unregulated cocoa market structure in the country. Prices were as low as N400,000 before the Cote D'Ivoire political crisis.
