Nigeria Cocoa Hurt By Currency Depreciation, Chemical Costs, Officials And Farmers Say

IBADAN, Nigeria–The output and quality of Nigeria’s 2020-21 cocoa crop are likely to suffer as increased chemical prices and a weaker naira are preventing farmers from being able to treat their farms, farmers and officials say.

“The cost of chemicals such as fungicides, herbicides and pesticides, which are mainly imported, has risen since the beginning of the year due to Nigeria’s poor economy and depreciation of its naira currency against the U.S. dollar,” said Isaac Ashaolu, a chemical dealer.

Because of a drop in oil prices caused by the Covid-19 pandemic, Nigeria is also facing a shortage of foreign exchange for the importation of cocoa chemicals and other goods, said an importer.

The Central Bank of Nigeria in August set the official rate of 379 naira to a dollar, from NGN360 previously. The exchange rate is now around NGN400 to NGN411 to the dollar while the parallel market rate was NGN484 to the dollar on Monday.

Importers of chemicals used in cocoa farming buy their dollars in the parallel market, which makes their products costlier for farmers.

A 50-gram sachet of Ridomil, a fungicide used to combat black pod disease on cocoa farms, now sells for NGN420 to NGN450, up from NGN250 to NGN300 last year, Mr. Ashaolu said.

A liter of pesticides is currently selling for NGN2,200 to NGN4,500, compared with NGN1,200 to NGN1,300 at the beginning of the year, he added.

“Farmers cannot buy much [chemicals] to spray their farms and rid them of insects and other disease; they are buying enough just to save their farms,” Mr. Ashaolu said.

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An official at the Ministry of Agriculture in Ibadan said inadequate spraying of cocoa farms with chemicals theoretically could result in a 30% to 35% drop in production.

The cocoa chemicals are also costly because of high import duty, freight and clearing charges, Mr. Ashaolu said, adding that it now costs around NGN800,000 to transport a container of chemicals to Ibadan, up from NGN200,000 a few years ago. This has also driven up the cost of imported chemicals, he said.

The cost of cocoa chemicals “is high, [and] farmers cannot buy adequate chemicals they need for cocoa farming,” Joshua Oyedele, a vice president of the Cocoa Association of Nigeria, said.

Mr. Oyedele said he would suggest that CAN should import chemicals and sell to farmers at subsidized rates to assist farmers to increase output and produce good quality cocoa.

Jimoh Adekola, a cocoa farmer in Ibadan, said he has been unable to spray his farm adequately since the beginning of the year because of the high cost of pesticides. “I would have applied more chemicals if I have been able to buy cheaper chemicals,” he said.

Nigeria’s cocoa production is estimated at 240,000 tons to 250,000 tons by industry officials and traders.