Nigeria Faces Cocoa Supply Threat as Prices Hit Record Highs Amid Forecasted Flooding


Cocoa Futures Surge to Record Highs Amid Supply Stress and Growing Weather Concerns

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Cocoa futures reached unprecedented levels on Thursday, surpassing $10,770 per ton as the market grapples with severe supply challenges exacerbated by looming weather threats in key producing regions.

The soaring prices reflect a staggering 153.4% surge since the beginning of the year, driven primarily by dwindling inventories stemming from adverse weather conditions and crop diseases affecting major cocoa-producing nations like Ivory Coast and Ghana. Bloomberg reports that local farmers are facing financial strain due to declining pay, hindering their ability to invest in maintaining production levels.

Adding to the supply woes is the looming threat of flooding in Nigeria, where 94% of the country’s cocoa is cultivated. Projections indicate significant output losses due to the impending weather event, further tightening global supply.

According to the International Cocoa Organization, production is anticipated to fall short of demand by 374,000 metric tons this season, underscoring the severity of the supply deficit.

In response to the supply crunch, cocoa traders are encountering shortages, prompting requests from Ghana and Ivory Coast to delay deliveries. The Ghana Cocoa Board has proposed rolling over bean sales of up to 250,000 tons into the next season, as reported by the Financial Times.

Amidst these challenges, cocoa futures trading has reached historic lows, prompting caution among investors. Darrell Martin, co-founder of Apex Trader Funding, expressed wariness, stating, “It’s so illiquid, I’m not touching it,” to Business Insider.

The impact is cascading down to consumers, with retail chocolate prices surging by 11.6% in US stores last year compared to 2022, reflecting the escalating cocoa costs in the market.

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Godwin Okafor
Godwin Okafor
Godwin Okafor is a veteran Financial Journalist, Internet Social Entrepreneur, and the visionary Founder of Naija247news Media Limited. With an extensive career spanning over 16 years in financial journalism, Godwin possesses a wealth of experience that seamlessly bridges both traditional and digital media landscapes. His journey in journalism commenced at Business Day, Nigeria, where he laid the foundation for his prolific career. In 2010, Godwin took a bold step by founding Naija247news Media, a platform that has since become a prominent player in delivering timely and accurate news. Educationally, Godwin Okafor holds a Bachelor's degree in Industrial Relations and Personnel Management from the prestigious Lagos State University, Ojo, Lagos. His commitment to continuous learning led him to the Lagos Business School, where he further honed his skills. Additionally, he is recognized as a Fellow of the University of Pennsylvania, having successfully completed the Wharton Seminar for Business Journalists. Throughout his illustrious career, Godwin has earned acclaim by winning numerous journalism awards, a testament to his dedication to excellence in reporting. Beyond his role as a Financial Journalist, Godwin Okafor wears the hat of the Chairman at Emmerich Resources Limited, the publishing entity behind Naija247news. His visionary leadership has played a pivotal role in shaping the media landscape and establishing Naija247news as a trusted source of information. Godwin Okafor's multifaceted expertise, commitment to journalistic integrity, and leadership in the realm of business journalism underscore his influential presence in both the media and entrepreneurial spheres.

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