Cocoa futures have surged more than 16% since the start of November, making it the best performing commodity with a market volume of 6,800 units traded so far.

The rise comes as cocoa production fell more than 14% year-on-year, with heavy rains in Ivory Coast and strong winds in Ghana, the two main producers, disrupting the harvest and tightening global supply.

As a result, cocoa futures prices, which track global cocoa prices, rose steadily throughout November, closing four consecutive weeks above their opening price and reflecting rising prices. of the world market.

This strong monthly performance has pushed year-to-date gains for cocoa futures in the commodities market to over 100%. Notably, the contracts have generated positive returns in 8 out of 10 months in 2024, as of the market open on November 20.

However, according to the AFEX wet season report, Nigeria’s favorable weather in the southern region could enable the country to make gains amid rising global cocoa prices.

Market Trend

Cocoa futures, which represent tradable contracts that track the global balance between cocoa supply and demand, have seen notable fluctuations in 2024.

• The year started with a notable increase, with gains accelerating significantly between January and March, surpassing levels seen during the same period of 2023.
• In March, cocoa futures prices jumped 132%, reaching 9,776 units, reflecting strong upward momentum.
• The dramatic rise in March was largely due to unfavorable weather conditions in Ghana, the world’s second largest cocoa producer, where seasonal strong winds and insufficient rainfall disrupted the cocoa harvest, tightening supplies and pushing up the costs.
• Since March, the market has struggled to regain stability, with ongoing supply issues fueling further volatility.
• As soon as the market opened on November 20, cocoa futures rose more than 16% during the month, from an opening price of USD 7,325.50 to USD 8,563.00, with a trading volume of 6,800 units.

This sustained upward move highlights continued supply pressures and growing global demand.

Nigeria’s cocoa production expected to grow amid rising global prices

Cocoa production in Nigeria is expected to grow by up to 10% in 2024, driven by rising international cocoa prices and strategic agricultural initiatives.

Over the past year, soaring prices in the global market have provided a strong incentive for Nigerian farmers to increase production, according to the AFEX 2024 Wet Season report.

The report shows that long-term cocoa planting programs launched in recent years are now reaching maturity, increasing harvest volumes this season.

“Cocoa production is expected to trend upward this season after several years of decline. notes the report. “This growth is mainly due to historically high cocoa prices, which result from increased international demand and supply shortages in major producing countries. »

Favorable weather conditions in the South West region, Nigeria’s main cocoa producing area, are a key factor in this growth, with the report forecasting a 10% increase in production, bringing total production to around 320,000 tonnes metrics in 2024.

The findings also shed light on the demographics of the cocoa farming sector in Nigeria.

• Around 76% of farmers surveyed are smallholders cultivating less than 2 hectares, while only 3% manage farms of more than 5 hectares.
• Most of these farmers are aged 36 to 45, reflecting a predominantly middle-aged workforce in the sector.

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