The prominence of cocoa in the Nigerian economy and its emergence as an important foreign exchange earner for the country are the prime factors providing the impetus for the growth of the Nigerian cocoa market. Nigeria was the world’s second-largest producer of cocoa prior to the discovery of crude oil in commercial quantities in the mid-1980s. Even though the oil industry was booming significantly, it has failed to create a significant number of jobs for the Nigerians as it uses a lot of costly equipment. Thus, the high unemployment and poverty levels have prompted the government to look again at cocoa as a feasible alternative to increase the number of jobs and enhance the economy. Moreover, the faltering crude oil prices and the urgent need for diversification of the economy has led to the paradigm shift towards the cocoa cultivation. Additionally, in order to increase the national cocoa output, the Nigerian government established the National Cocoa Development Committee (NCDC) for the producing states with a view to rehabilitating old farms. The committee works with an aim to empower farmers to develop strong, prosperous cocoa communities and to meet the peculiar needs of the farmers, stakeholders, development and other partners in ensuring the sustainability and development of the cocoa industry. These factors have resulted in the unprecedented adoption of cocoa farming as the primary business by the majority of the Nigerian populous.
The Nigerian cocoa market was valued at $477 million in 2018. Moreover, the demand for cocoa products is anticipated to propel at a CAGR of 5% during the forecast period 2019-2025.
Governmental Initiatives Promoting the Nigerian Cocoa Market Growth—
Nigeria’s cocoa market is anticipated to expand with the incorporation of modern agricultural techniques in the agricultural practices of indigenous farmers and the government’s engagement with stakeholders to ensure inputs and subsidies. The government is working towards providing sufficient support in terms of high yield seedlings, sophisticated equipment for production, improved processing, and storage facilities. For instance, the African Cocoa Initiative Phase II, a public-private partnership program funded with an amount of $12 million is aimed at sustainably enhancing cocoa productivity among financially marginalized farmers in Nigeria, and other few countries. On the back of the aforementioned initiatives and developments, the production of cocoa increased significantly. The production quantities of cocoa beans increased from 298, 029 tons in 2016 to 328,263 tons in 2017. Furthermore, the improvement of the value chain in the cocoa industry has promising prospects for growth in the export markets. Appropriate logistics channels, strategic marketing, and association with the international market players with the help of relevant agencies such as Nigerian Export Promotion Council (NEPC) will ultimately stimulate the cocoa production and enhance trade activities.
Health Benefits Associated with Cocoa Stimulating the Nigerian Cocoa Market—
Cocoa or cocoa bean is obtained from drying and fermenting Theobroma cocoa fruit. These seeds are further processed to extract cocoa powder, cocoa liquor, cocoa oil, cocoa butter, and other solids. The emergence of cocoa as a major agriculture export crop in Nigeria can be attributed to the health benefits associated with it. Cocoa helps in reducing impact of high blood pressure, constipation, intense fatigue syndrome, asthma, and various neurodegenerative diseases. It reduces the risk of cancer, improves heart health, and also helps in treating copper deficiency. Moreover, it has excellent anti-oxidant properties. Owing to its health benefits, the cocoa is gaining high demand across varied industries such as food and beverage, cosmetics, and pharmaceuticals. Therefore, the beneficial features associated with cocoa is considered to be a vital factor for the growth of the Nigerian cocoa market.
Confectionary Sector Emerging as a Key Application segment—
On the basis of application, confectionery is considered to be the key application segment that is anticipated to propel at a highest growth rate during the forecast period. The growth of this segment is attributed to the increasing demand for chocolate and chocolate coatings. Some of the most popular products where cocoa is found are sweet chocolate, drinking chocolate, milk chocolate, dark chocolate, baking chocolate, brownies, and cocoa butter. Countries such as Netherlands, Germany, Malaysia, Spain, Italy, and China are increasingly importing cocoa from Nigeria for their chocolate processing plants to manufacture chocolate products such as bars, candies, pastries, cakes, and chocolate drinks. Moreover, the presence of processing companies such as Ede Cocoa Processing plant, FTN Cocoa Processors Plc, and Ile Oluji Nigeria Limited are processing cocoa for the production of chocolate products. Therefore, confectionery application segment is anticipated to prosper at a CAGR of 5.1% through to 2025.
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Nigerian Cocoa Market Companies’ Strategies—
Prominent companies that are striving to secure majority of the Nigerian cocoa market share are Cocoa Processing Factory, Starlink Global & Ideal Ltd., FTN Cocoa Processors Plc, Olam Nigeria Limited, Olatunde International Ltd., Akeem & Kamoru Nigeria Ltd., Sucden Cocoa Nigeria Limited, Wacot Ltd., Saro Agroallied Ltd., Springfield Agro Ltd., Tezcom System (W.A) Ltd., and Wole Enterprises. These companies are frequently involved in adopting business strategies such as collaborations, mergers, partnerships, and acquisitions, in order to strengthen their presence in the cocoa market of Nigeria and to leverage the presence of abundant raw cocoa. Moreover, they are investing in research and development activities to innovate new variety of cocoa products on par with the demands of the customers.
Ghana Cocoa Market
African Cocoa Market
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