Flood to disrupt Nigeria’s cocoa export as price rises above $10,100 – Report

The planting of cocoa and the mid-crop harvest in Nigeria will face disruptions due to warnings from the Nigeria Hydrological Service Agency (NIHSA) about severe flooding in the country’s primary cocoa-producing regions, according to a Bloomberg report.

Joseph Utsev, the Minister of Water Resources and Sanitation, announced in Abuja on Wednesday that the states susceptible to flooding include Ondo, Cross River, Osun, Oyo, Ogun, Taraba, and Delta.

These areas are responsible for 94% of Nigeria’s production of cocoa, a key ingredient in chocolate.

Mufutau Abolarinwa, President of the Cocoa Association of Nigeria, earlier stated in February that the country, which ranks as the fifth-largest cocoa producer worldwide, anticipates a reduction in its cocoa output for the 2023-24 season.

Originally projected between 280,000 and 300,000 tons, the forecast has now been adjusted to 225,000 tons due to adverse weather impacting harvests.

Expected flooding from April to November could exacerbate these challenges, deepening a global cocoa shortage that has already pushed futures to unprecedented highs.

This issue is compounded by similar struggles in Ivory Coast and Ghana, the top cocoa producers, who have also experienced reduced yields due to harsh weather and diseases.

The cocoa season in Nigeria starts in October with the larger main-crop harvest and continues with the smaller mid-crop harvest, which concludes in June.

What you should know

Nairametrics earlier reported that Cocoa futures climbed back above the $10,150 level on the Intercontinental Exchange (ICE) in New York, stabilizing below the record highs set earlier this week, amid plans by Nigeria to increase its production.

In its latest monthly report, the International Cocoa Organization reported that it expects the global cocoa supply deficit to rise to 374,000 metric tons in the 2023–24 season, marking a 405 per cent increase from the 74,000 tons deficit recorded in the previous season. As of April 2024, it was discovered that customers in Europe and America were facing a shortfall of between 650,000 and 700,000 tons. Meanwhile, the Nigeria Hydrological Services Agency (NIHSA) predicts upcoming floods that are expected to inundate some of the regions where the crops are grown, potentially compromising the initially forecasted output.