Business

Importers project N298bn from cocoa as earnings drop

There is fear that earnings from cocoa beans export will further drop by 19.4 per cent ($556.67) before the end of the year because of delay, low price and fungi disease, which has affected production in Nigeria.

 

Findings, however, revealed that exporters earnings’ projection has been reduced to N298billion ($662.07million) within six months, leading to N65.02billion ($144.5million) loss from the projected production.

 

Nigeria, the fourth largest cocoa producer in the world with a forecast output of 285,000 metric tonnes in 2020, had projected to earn $806.57million but the price of the beans has dropped since February, from $2,880.63 per tonne to $2,323.08 per tonne tonnes as at August 8, 2020.

 

The International Cocoa Organisation (ICCO) has attributed the sharp drop in the price of the commodity to downward trend in the global market, especially in Europe, which remains the hub of the coronavirus (COVID-19) pandemic.

 

As at February 2020, the price of the beans was $2,880.63 per tonne but in March it tumbled to $2,440.94 per tonne and later crash to $2,323.08 in the global market.

 

Between 2018 and 2019, over 81per cent of Nigerian cocoa was exported to Europe, with 65per cent exported to the Netherlands and German Nevertheless, cocoa farmers had complained that the lockdown in Lagos and Ogun states had affected the production in Ondo and Cross River, leading to fall of the produce and loss in foreign exchange.

 

Besides, it was gathered that farmers lacked access to chemical and labour because of corona virus, thereby hindering them to fumigate cocoa trees to avoid black pod disease.

 

It would be recalled that the Cocoa Association of Nigeria (CAN) had also complained that over 6,000 tonnes of cocoa beans were stuck at the Lagos Port and some warehouses in some states because of the lockdown and inability to get to the port.

 

The President of the association, Mufutau Abolarinwa, explained that some beans ordered for export had been disrupted by lockdown. He said that cocoa mid-crop output would be weak because of the backlog of unshipped beans created by the corona vi- rus pandemic.

 

Abolarinwa further stated that the interstate lockdown had created headache for cocoa delivery. He explained: “Ships are being quarantined at the port, creating extra storage costs. Trading houses are anxious to receive their shipments and delays could affect demand for further beans from farmers, especially as the mid-crop harvest is about to start.

We are hoping for an improvement.” He stressed that the nation’s mid-crop – harvested between May and September – comes  in between 50,000 and 60,000 tonnes when weather conditions are good and chemicals readily available to fumigate diseased trees.

 

The president added that farmers had entertained fear that the late rains would affect bean weight for the mid-crop, which could be around 270-280 grammes, compared with an average weight of around 300 grammes.

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