Cocoa Price May Spike Due To Poor Weather Conditions In Major Producing Countries - Diversity Media || Your 1st Choice

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Cocoa Price May Spike Due To Poor Weather Conditions In Major Producing Countries

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Prices of cocoa at the international market may spike in the medium or long term due to poor weather condition in Ivory Coast, a major producing country.

According to a Financial Derivatives Company’s (FDC’s) commodity update last week, arid weather conditions in Ivory Coast could result in increased cocoa prices.

Though, cocoa prices were down 2.86 per cent to $2,274 per metric ton last week amid the unfavourable weather conditions in Ivory Coast, the FDC analysts believe a prolonged worsening weather could affect prices.

International cocoa traders in separate telephone interviews with DAILY INDEPENDENT stated that increase in prices should be expected as any drop in production in Ivory Coast, which is a major producing country, will affect some other producers thereby causing speculative demand for the limited available cocoa.

Oba Dokun Thompson, the Oloni of Eti-Oni while reacting to the report said that increase in price might happen because if the weather is not good and the production capacity drops in Ivory Coast every other place will benefit because everywhere is dropping.

He said that once Ivory Coast loses some of its production capacity, Ghana too is affected a little bit, Nigeria and Cameroun will be affected a little bit and that several people will now be trying to rush for what is available.

“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,” he said.

He, however, said that at the moment in Nigeria farmers have done all the harvest for the main crop which was done in November last year and now going into the light crop season.

Oba Thompson noted that it is not just price dropping that is affecting Nigeria farmers now, that the output too has dropped with about 20,000 to 30,000 metric tonnes.

“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) said that every increase in price for a ton of cocoa will not augur well for farmers, that cocoa farmers still believe that the remunerative price for a ton of cocoa should not be anything less than $4500.

He said that until it gets to that benchmark farmers will still not be too excited.

The CAN President, stated that stakeholders in the cocoa industry are not only looking at increase in price, but are also intending that Nigerians consume more cocoa, that will also 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 has started since December last year, adding that if it persist, it is capable of reducing the size and also hamper the quality of the crop which at the end of the day not command any market price.

“We are calling on FG to support farmers with highly subsidise foliar fertilizer. That is the only way we could tackle this challenge.”

Source: Independent

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