Nigeria aims to team up with Cameroon to agree a premium for their cocoa with buyers, the vice president of the World Cocoa Producers Organisation told Reuters, after top growers Ivory Coast and Ghana moved to boost prices for their crops.
The plan suggested by Nigeria, the world’s fourth-largest cocoa producer, is part of a drive by growers in West Africa and Latin America to try to address a perceived imbalance between farmers’ incomes and money made by big commodities traders.
Ivory Coast and Ghana, which account for nearly two thirds of global output, have imposed a fixed “living income differential” of $400 a tonne on all cocoa contracts sold by either country for the 2020/21 season.
Despite being the world’s leading cocoa producers, the two countries exert limited influence over international prices. Cocoa producing countries have sought ways to protect farmers from market swings after global overproduction sent prices crashing in 2016-17, and oversupply has meant a slow recovery.
World Cocoa Producers Organisation Vice President Sayina Riman, who doubles as president of the Cocoa Association of Nigeria, said Ivory Coast and Ghana had effectively agreed a $400 per tonne premium above global prices for their cocoa, and that Nigeria wanted to follow suit to protect its farmers.
Nigeria has had informal discussions with Cameroon, Riman said.
“We are talking to Cameroon to see if we can become a regional bloc … and see if we can get our buyers who know our quality to give us better differentials,” he said in a telephone interview.
“We need to approach it as a bilateral discussion,” he said.
Peru has said it would propose a minimum price of $3,200 per tonne to its regional growers, which together make up 17 per cent of global output, after the moves by West African producers.
Nigeria and Cameroon both account for around 10% of global production and have the potential to more than double output within five years, Riman said. The countries share a border and similar weather.
