Post by Trade facilitator on Mar 15, 2021 17:48:06 GMT 1
Cocoa is one of the leading agricultural commodities in Nigeria, and therefore it
occupies a leading position in the export of agricultural commodities.
Currently, and by 2020 statistics, Nigeria is the fifth world largest producer of
cocoa with an annual production of 250 metric tons, after Ivory Coast with 2,180
Mt, Ghana with 850 Mt, Ecuador with 325 Mt. We are also the third largest
exporter, after Ivory Coast and Ghana.
In the 1950s, and 60s cocoa used to be the major foreign exchange earner for the
country. As at 1970, Nigeria was the second largest producer of cocoa in the
world.
The Nigeria cocoa business sector is dominated predominantly by small holder
farmers. They are between 250,000 – 300,000 small scale farmers, and it is the
number one exportable product apart from crude oil.
Investments in the oil sector in the 70s and 80s, greatly affected the production of
cocoa in Nigeria negatively. Our share of the world output nose-dived when the
government and the investors shifted to crude oil production and export.
Regrettably, the production cocoa accounted for only 0.3% of agricultural Gross
Domestic Product (GDP) of the country. It is of note that many countries that
were in cocoa business big time are still into it and their economies are better for
it.
Incidentally Nigerian cocoa boasts of excellent qualities such as:
- Good bean count
- Low slatey
- Low mould
- Strong aroma, and smooth flavor.
With recent interest shown in boosting agriculture by the federal government,
many investors are coming into the cocoa business. The local processing sector is
growing fast thereby creating more employment in the sector.
Raw Cocoa beans account for about 90% of the $804 million of the Nigerian cocoa
exports. Cocoa butter represents $67 million, and cocoa paste commands $28
million respectively.
Despite all the problems and pitfalls, cocoa farming is a profitable venture
because of the cash crop’s economically diverse value chain products, as well as
its international acceptance.
However, majority of Nigerian businessmen in the cocoa value chain tend to
concentrate on the export of cocoa beans only. This business is very lucrative and
relatively easy to manage compared to some other agricultural commodities.
Before we go further, let us look at the world’s largest importers of raw cocoa
beans. This information will enable us to decide on where to beam your search
for international buyers.
The world’s largest importers of raw cocoa beans are Netherlands, the USA,
Germany, Malaysia, and Belgium. They demand an average of 2 million tonnes
annually.
There is currently a surge in the cocoa market with the local price in Nigeria
averaging N700,000 - N1,000,000 per metric ton, and the international price is about $2,560
per metric ton.
You can see that there is a great opportunity for those who want to venture into
export of raw cocoa beans from Nigeria. Though there are other costs to be
incurred before you finally declare your net profit in the business, but from all
indications it is a good business to go into.
Capital requirement to start cocoa export business in Nigeria:
If you want to start the business with your own capital, it means that you will
need to have a substantial amount of money because cocoa export requires huge
amount of money. You will need to bring in about N25 to N35 million to be able to do the
business profitably. But we will teach you how to do the business without your
own capital. Stay with us.
Moisture content allowable for cocoa export:
Generally, a moisture content of about 7.5% is allowed, and it indicates that the
cocoa bean is stable.
How do you package cocoa beans?
In Nigeria, cocoa beans are traditionally packed in jute bags of 60 – 65kg net per
bag before sanitary certification. It is important to note that as we normally pack
our cocoa in jute bags, you must fumigate your cocoa against infestation regularly
before shipment.
Storage and shipment of cocoa bags:
Cocoa beans must be shipped in well-ventilated conditions, especially for
transportation from the warm tropical producing environments to much colder
destinations. Generally adequate steps must be taken to store the cargo in well-
ventilated containers with adequate space.
Please watch out for the next article on cocoa export from Nigeria and other West
African countries. We are going to reveal to you how you will get finance for your
cocoa export business. Do not be afraid of the huge capital requirement for the
business.
