Nigeria cocoa buyers chase new harvest to blend with old stock

Cocoa farm-gate prices in Nigeria have jumped since the start of the main crop season as buyers chase newly harvested beans to blend with old stock of high-mold cocoa to make them fit for export, farmers and traders said.

The main crop harvest, which began early in October, is still trickling in after damaging weather in August and September, leading to a rush for what is available, according to Julius Ogundagbede, a farmer in the south-western cocoa-growing town of Idanre, told Bloomberg. “Only very few pods were ripe enough for harvesting at the onset of the season,” he said.

Prices have risen 6 percent to 665,000 naira ($3,374) per metric ton from 630,000 naira in the southwest, which accounts for about 70 percent of the country’s output since the start of October, Owolabi Omokore, a trader based in the main south-western cocoa-trading city of Akure, said.

In the south-eastern cocoa belt around the town of Ikom, prices have risen more than 3 percent to 630,000 naira per ton, according to Godwin Ugwu, a licensed buying agent.

“We need the new beans to blend our large holding of high-mold cocoa to make them fit for export,” Segun Osinuga, managing director of Waytem Ltd., a cocoa-exporting company, said from Lagos, the commercial capital.

Nigeria is the world’s largest cocoa producer after Ivory Coast, Ghana and Indonesia with a government-estimated output of 350,000 tons in the 2013-14 planting season.

The International Cocoa Organization estimates Nigeria’s output at 240,000 tons for the same period. Mold in beans for export are acceptable when less than 5 percent, according to the ICCO.

Nigeria’s two cocoa harvests include the smaller midcrop from April to June, and the main crop from October to December.

Farm-gate prices are expected to fall as more harvest reaches the market in the coming weeks, according to Idanre town farmer, Ogundagbede. Weekly cocoa deliveries in the town are now about 500 tons per week, compared with about 2,500 tons at the peak of the main crop, he said.