Nigeria Exporters Smile as Cocoa Prices Hit $4,000 Per Ton, Highest Since 1978

Nigeria’s cocoa exporters are smiling to the bank as cocoa prices are trading just shy of USD 4,000 a tonne, the highest level since November 1978. It is 14% higher on the month and 54% on the year.

Nigeria is the world’s fifth-largest producer of Cocoa, and produced an estimated 280,000 metric tons of Cocoa last year, according to Statista.

According to Bloomberg, harvests in Ivory Coast and Ghana – some of the world’s largest cocoa producers – are producing lower crop yields, which has led to tighter supplies, therefore supporting higher prices.

“The market does not seem convinced that production will recover enough to avoid a supply deficit for 2023/24,” ADM Investor Services Inc. analysts said in a note.

There is also an increasing risk that El Nino-induced weather disturbances could cause the global cocoa market to sink into a deficit for the third year.

Ivory Coast government data on Monday showed Ivory Coast farmers shipped 288,686 MT of cocoa to ports from October 1-November 5, down -17.3% from the same time last year.  The Ivory Coast is the world’s largest cocoa producer.

Also, ICE-monitored cocoa inventories held in U.S. ports have declined steadily since June and posted a 2-1/2 year low on Friday.

Recent heavy rain in West Africa has caused black pod disease to spread and is a major bullish factor for cocoa prices.

The spread of the disease, which causes cocoa pods to turn black and rot, could result in lower cocoa crop quality and production and push the global cocoa market into a third year of deficit for the 2023/24 season.

Earlier this week, Oreo-maker Mondelez International said it would have to hike prices on some of its products due to the soaring cocoa and sugar prices.

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