This article is for passionate ‘chocoholics’ and shrewd entrepreneurs alike; the allure of cocoa from Nigeria is undeniable. With its rich flavour profile, diverse varieties, and burgeoning production, Nigeria emerges as a powerhouse in the global cocoa market. However, navigating the landscape of importing Nigerian cocoa can be intricate, demanding practical knowledge and deep respect for the vibrant culture that cultivates this precious bean. This agro-commodity plays a significant role in the country’s economy and provides livelihoods for over two million smallholder farmers.
The Nigerian cocoa industry pulsates with activity across all value chain points from farm to factory. Planting, harvesting, Fermenting, drying, and preparing the beans for export involve meticulously calibrated processes, often handled by local cooperatives and processing units.
Due to favourable climate conditions, cocoa is mainly grown in Nigeria’s southwestern and central regions. The southwest region accounts for about 70% of production, with the states of Ondo, Osun, Ekiti, and Oyo being the leading producers. Other states with significant cocoa output include Cross River, Akwa Ibom, Edo, Delta, and Ogun.
This ultimate guide serves as your compass, demystifying the process and empowering you to tap into the immense potential of Nigerian cocoa, all while contributing to Africa’s sustainable growth.
Let’s dive right in.
Cocoa Production in Nigeria
Nigeria produces between 250,000 to 300,000 metric tons of cocoa annually. The crop is grown mainly on small, family-owned farms of just 1-4 hectares in size. Cocoa requires tropical conditions with abundant rainfall, making the forested southern regions of Nigeria ideal for cultivation.
Nigeria’s cocoa industry presents a compelling investment opportunity with untapped potential and is poised for significant growth. Nigeria currently boasts a robust cocoa production landscape, ranking as the sixth-largest global producer with annual output exceeding 1.3 million metric tons. (For context, this will translate to a potential 32 billion chocolate bars.)
Beyond sheer quantity, Nigeria’s cocoa distinguishes itself through its remarkable diversity. From the robust and versatile Amelonado to the earthy and complex Forestero and the rare, delicate Criollo with its intoxicating fruit notes, Nigerian beans offer a symphony of flavours, catering to every taste profile and market segment. This spectrum gives investors a unique canvas to craft bespoke chocolate experiences, captivating discerning palates and mass-market audiences.
Investing In Cocoa
The global cocoa landscape is significantly shifting, with emerging markets accounting for over 60% of projected future consumption. With its rich endowment and commitment to responsible production, Nigeria stands poised to capture a significant share of this burgeoning market. By partnering with Nigerian stakeholders, investors can access a reliable source of high-quality beans, tap into a growing consumer base, and leverage a supportive business ecosystem.
Nigeria’s cocoa industry offers a compelling blend of abundance, diversity, ethical practices, and a supportive infrastructure. We hope to see the continual growth of this sector in the Nigerian Economy.
Cocoa Production in Nigeria
Nigeria produces between 250,000 to 300,000 metric tons of cocoa annually. In 2021, the number was approximately 241,000 metric tons; in 2022, an approximate 238,000 metric tons was produced. The estimate for this year has been held at around 280,000. The crop is grown mainly on small, family-owned farms of just 1-4 hectares in size. Cocoa requires tropical conditions with abundant rainfall, making the forested southern regions of Nigeria ideal for cultivation.
Nigeria’s cocoa industry presents a compelling investment opportunity with untapped potential and is poised for significant growth. Nigeria currently boasts a robust cocoa production landscape, ranking as the sixth-largest global producer with annual output exceeding 1.3 million metric tons. (For context, this will translate to a potential 32 billion chocolate bars.)
And beyond sheer quantity, Nigeria’s cocoa distinguishes itself through its remarkable diversity. From the robust and versatile Amelonado to the earthy and complex Forestero and the rare, delicate Criollo with its intoxicating fruit notes, Nigerian beans offer a symphony of flavours, catering to every taste profile and market segment. This spectrum gives investors a unique canvas to craft bespoke chocolate experiences, captivating discerning palates and mass-market audiences.
Furthermore, Nigerian farmers’ commitment to ethical and sustainable practices adds a layer of allure for socially conscious investors. The prevalence of cooperatives and processing facilities adhering to responsible standards ensures not only the highest quality beans but also the fair treatment of farmers and the preservation of the environment.
By investing in Nigerian cocoa, you become part of a virtuous circle, fostering economic growth while promoting responsible practices and building a brighter future for the region.
Factors Influencing Cocoa Production in Nigeria
The global cocoa landscape is significantly shifting, with emerging markets accounting for over 60% of projected future consumption. With its rich endowment and commitment to responsible production, Nigeria stands poised to capture a significant share of this burgeoning market. By partnering with Nigerian stakeholders, investors can access a reliable source of high-quality beans, tap into a growing consumer base, and leverage a supportive business ecosystem.
Nigeria’s cocoa industry offers a compelling blend of abundance, diversity, ethical practices, and a supportive infrastructure. We hope to see the continual growth of this sector in the Nigerian Economy. While brimming with potential, Nigeria’s cocoa production faces a complex interplay of factors influencing its success. Understanding these influences is crucial for navigating the industry and maximising its potential.
Favourable Factors:
- Favourable climate: Nigeria’s tropical climate, abundant rainfall and sunshine provide the ideal setting for cocoa cultivation.
- Fertile soil: Rich volcanic soils in the southwest offer the perfect nutrients for thriving cocoa trees.
- Diverse varieties: Nigeria boasts a rich tapestry of cocoa varieties, each with unique flavour profiles and market appeal.
- Strong local expertise: Generations of skilled farmers deeply understand cocoa cultivation and traditional practices.
- Rising global demand: The world’s insatiable appetite for chocolate translates to a burgeoning market for high-quality cocoa beans.
- Focus on ethical practices: Increasing awareness of ethical sourcing and fair trade practices creates a favourable environment for responsible cocoa production.
Sour Factors to watch out for:
- Ageing cocoa trees: Many trees are reaching the end of their productive lifespan, leading to lower yields. We must create frameworks to ensure regular replanting even as the industry intends to scale.
- Pests and diseases: Cocoa black pod disease, fungal infections, and insect pests can significantly impact crop yields.
- Inadequate infrastructure: Poor rural infrastructure, including limited access to roads, electricity, and water, hinders efficient production and transportation.
- Post-harvest losses: For the industry to scale, we must reduce post-harvest losses to the bare minimum. Lack of proper storage facilities and processing techniques are the most critical factors that lead to significant post-harvest losses.
- Limited access to finance: Smallholder farmers often need help accessing financing for essential inputs and equipment.
By acknowledging both the sweet and sour aspects of cocoa production in Nigeria, we can work towards a future where the nation’s cocoa farmers, investors, and chocolate lovers can all savour the rewards of this valuable crop.
Variety of Cocoa Grown in Nigeria
They say variety is the spice, and the Nigerian Cocoa industry reinforces this truth. Let’s delve into the vibrant world of Nigerian cocoa varieties to learn about them;
- The Amelonado: Originating in Brazil, the Amelonado is the most widely cultivated variety in Nigeria. Known for its robust chocolate flavour and high yields, it’s the backbone of many commercial chocolates.
- The Forestero: This hardy bunch hails from the Amazon and thrives in diverse conditions. Its earthy depths, hints of spice, and a touch of bitterness add complexity and intrigue to chocolate blends.
- The Criollo: The Criollo is a delicate and rare variety of Cocoa. Prized for its smooth, fruity notes and subtle floral aromas, it gives whispers of raspberry and citrus flavours that give chocolate a different feel.
- Others: Beyond the Big Three, Nigeria boasts lesser-known varieties, each with unique charm. The Nacional, with its floral intensity; the Esmeraldas, with its nutty undertones; and the Iquitos, with its vibrant orange notes, all contribute to the rich tapestry of Nigerian cocoa.
Where These Gems Shine:
- Amelonado: Thrives mainly in the southwestern cocoa belt, particularly in Ondo and Osun.
- Forestero: Adaptable to diverse regions, located across the southwest and venturing north.
- Criollo: Primarily cultivated in smaller pockets, with pockets of production in the Cross River and Akwa Ibom states.
- Rare Varieties: Often found in specialised farms or research centres nationwide.
At Matta, we believe in unlocking the full potential of each cocoa bean. We work directly with farmers and other stakeholders to ensure the smooth and consistent running of the Cocoa Value chain in Nigeria. We are focused on providing ethical sourcing and sustainable practices.
Benefits of Sourcing Cocoa from Nigeria
As a discerning professional in the cocoa industry, your quest for excellence leads you to explore deeply to find diverse origins and unique flavour profiles. Nigeria emerges as a captivating prospect in this search, offering many benefits beyond mere affordability. Let’s delve into compelling reasons to source your cocoa from the heart of West Africa:
High-Quality Beans:
Nigerian cocoa beans are known for their high quality and decadent chocolate flavour. The beans have higher fat content than other origins, producing superior taste and aroma. Nigerian cocoa varieties like Amelonado have fruity, floral notes with nutty undertones. Proper fermentation and drying techniques further enhance the flavour profile. With attention to detail during processing, Nigerian beans yield complex, balanced flavours of chocolate.
Well-Established Supply Chain:
As one of the leading cocoa producers globally, Nigeria has a well-developed supply chain spanning farming, aggregating, exporting, and more. There are systems for sourcing, sorting, and shipping cocoa beans from the numerous small farms scattered across the cocoa belt—intermediaries aggregate beans for export, helping to consolidate supply and crops from different communities. High volumes of beans are exported from ports like Lagos and Port Harcourt to meet global demand. Overall, the existing frameworks make sourcing Nigerian cocoa efficient.
Variety of Flavors:
Nigeria boasts a captivating array of cocoa varieties. The robust Amelonado forms the foundation, the Forestero adds earthy depth, and the rare Criollo elevates blends with its delicate floral notes. Beyond these stalwarts, Nacional’s floral intensity, Esmeraldas’ nutty nuances, and Iquitos’ vibrant citrus whispers offer endless possibilities for makers of chocolate.
Ethical Sourcing and Sustainable Practices:
Driven by a commitment to responsible sourcing, Nigeria is actively embracing ethical practices. Fairtrade initiatives empower local communities while sustainable farming methods preserve the environment. By partnering with reputable cooperatives and processors, you ensure the highest quality beans and a supply chain built on integrity and social responsibility.
Direct Access:
Nigeria’s thriving cocoa industry facilitates direct partnerships with farmers and cooperatives. This eliminates middlemen, allowing you to trace your beans from tree to bar, ensuring complete transparency in quality, origin, and ethical practices. This direct connection fosters long-term relationships and empowers local communities, creating a win-win scenario for all.
Seamless Delivery:
Nigeria boasts a well-established infrastructure and experienced logistics providers, ensuring smooth delivery of your precious beans. Seasoned customs brokers and reliable shipping partners navigate the intricacies of international trade, minimising risks and delays. With a partner like Matta, you can ensure efficiency, keep your supply chain agile, and ensure uninterrupted production.
Competitive Pricing, Strategic Advantage:
While cost is a factor, it should not overshadow quality and ethical considerations. Nigeria offers a competitive edge, balancing cost-effectiveness, exceptional quality, and diverse flavour profiles. This strategic advantage allows you to optimise your production costs without compromising taste or ethical sourcing, enhancing your brand reputation and market appeal.
Untapped Potential, Growth Opportunities:
Nigeria’s cocoa industry is poised for significant growth. With rising global demand and a focus on ethical practices, the potential for expansion is immense. By investing in Nigerian cocoa now, you become part of this exciting journey, reaping the rewards of a burgeoning market and solidifying your position within the sustainable cocoa landscape.
Cultural Connection, Authentic Flavors:
Sourcing from Nigeria goes beyond mere business; it’s a cultural exchange. You connect with the rich heritage and traditions of Nigerian cocoa farming, capturing the essence of the land in your chocolate creations. This cultural connection adds authenticity and depth to your brand story and makes brand differentiation easier by resonating with consumers seeking more than just a sweet treat.
How to ensure the Quality of Cocoa
When importing cocoa beans from Nigeria, it’s essential to source only the highest quality beans. This requires understanding how to identify Grade 1 beans and assessing bean quality based on fermentation and drying processes.
Identifying Grade 1 Beans: Grade 1 cocoa beans are characterized by their large size and dark purple color. They should be fully fermented and dried, with a moisture content of 7-8% and a fat content of 54-58%. When cut open, the cotyledons should be plump and free from mould, insects, or signs of germination. The beans must have a uniform size and shape, with intact shells and minimal foreign materials.
Understanding Fermentation and Drying Processes: Proper fermentation for 5-7 days reduces bitterness and develops chocolate flavors. Beans should dry naturally or artificially to reach 7-8% moisture, preventing mould and maintaining quality. Consistent drying enhances flavor, while inadequate or excessive drying can ruin the beans.
Assessing Bean Quality: Continuously evaluate bean quality, checking for fermentation, moisture, and flavor profiles. Laboratory analysis may be necessary to ensure the highest quality for chocolate production.
Navigating Logistics and Documentation When Exporting Nigerian Cocoa
The logistics of exporting cocoa beans from Nigeria requires understanding the procedures, paperwork, shipping, customs clearance, and managing costs.
Understanding Export Procedures and Paperwork: To export cocoa beans from Nigeria, exporters must register with the Nigerian Export Promotion Council (NEPC) and obtain a certificate. Required documents include a Combined Certificate of Value and Origin (CCVO), a Clean Certificate of Inspection (CCI) for quality assurance, a Single Goods Declaration (SGD) form for shipment details, and a phytosanitary certificate ensuring the cocoa is disease-free.
Arranging Shipping and Customs Clearance: Early booking is essential due to potential congestion at major ports like Apapa and Tin Can in Lagos and Port Harcourt. Hiring a customs agent facilitates efficient navigation through customs procedures.
Managing Costs: Budget for transportation, certifications, port fees, customs charges, and agent fees. Consolidating shipments can reduce costs, and understanding shipment terms like Free on Board (FOB) clarifies buyer-seller responsibilities. Pre-shipment finance can assist with cash flow until payment is received.
Mitigating Risks when Importing Cocoa From Nigeria
Importing cocoa from Nigeria comes with certain risks that must be managed appropriately. Here are some of the critical risks to be aware of and how to mitigate them:
Avoiding Effects of Commodity Price Fluctuations
Cocoa is a commodity, so its price can fluctuate significantly based on supply and demand dynamics. To manage this, have flexible sourcing arrangements and multiple suppliers in different regions. This diversification protects you if prices spike in one area. Also, negotiate fixed pricing or price collars when possible. Keep abreast of market trends and stock up when prices are low.
Preventing Spread of Diseases
Cocoa trees are prone to diseases like black pod rot, swollen shoot virus, and witches’ broom disease. These can devastate crops. Work only with suppliers following good agricultural practices. They must use disease-resistant cultivars, maintain proper sanitation, prune diseased branches, and apply recommended sprays and fungicides. Avoid importing from infected regions. Inspect shipments thoroughly.
Ensuring Traceability
Know exactly which farms your cocoa is coming from. This traceability allows you to monitor quality and labour practices. Have a transparent chain of custody documentation from farm to export. Require suppliers to track and report on sources. Conduct site visits to audit farms directly. Isotope testing can verify geographical origin. Blockchain solutions can enhance supply chain transparency.
Funding and Financing
Funding and financing are critical steps in the cocoa export process that demand strategic planning and preparation. Obtaining adequate financing ensures a steady flow of working capital to purchase, process, and ship cocoa while mitigating cash flow difficulties. You can work with Nigerian banks to secure pre-export financing based on confirmed orders.
Sustainability and Certifications
Sourcing cocoa from Nigeria provides opportunities to implement sustainable practices and pursue ethical certifications. With growing consumer demand for sustainably produced cocoa, establishing responsible farming and trade practices can add value to your imported cocoa.
Implementing Sustainable Practices
Work closely with your supplying farmers to implement sustainable farming methods. Promote agroforestry techniques that incorporate shade trees to preserve biodiversity. Encourage natural pest control and organic fertilisation over chemical inputs. Facilitate farmer training programs on sustainable practices. When combined, our collective efforts will culminate in the growth of the Cocoa industry in Nigeria and, overall, the Nigerian Economy.
The Future of the Nigerian Cocoa Industry
Nigeria has significant potential for cocoa production and export growth in the coming years. The country is currently positioned as one of the important net exporters of this commodity, and several factors point to a promising future for the country’s cocoa sector:
- Increasing global demand
- Nigeria currently produces approximately 360,000 metric tons of cocoa per year. This production could increase with more significant farm investment and training for farmers.
- The government has set goals to reach 500,000 metric tons of production by 2025. This would make Nigeria the 4th largest global producer.
- Significant room exists to expand planted acreage. Only about 30% of suitable cocoa-growing areas are currently produced.
- Rehabilitation programs to rejuvenate old, low-yielding trees could significantly boost yields.
- There is growing interest from young farmers in entering cocoa production, bringing new energy to the sector.
- Export volumes could rise in tandem with increased production. Nigeria is close to target markets like Europe.
The Nigerian government aims to expand cocoa production and processing under its economic development plans. Government programs could also provide training and resources to help farmers learn best practices. The long-term impact of this sector is imminent, and we hope that the Nigerian government continues to incentivise its growth.
Wrapping up…
Wrapping up, Nigeria has traditionally focused on exporting raw cocoa beans, missing out on significant domestic value addition through processing. With investment in local processing facilities, Nigeria can produce cocoa powder, liquor, butter, and other ingredients, capturing more profit and supporting job creation while driving economic development.
Processing cocoa locally enhances supply stability, quality control, and reduces shipping costs, while taxes on exported raw beans further incentivize in-country processing. This strategic approach allows companies to source directly from farmers and minimizes transportation costs.
As we envision a future where Nigerian cocoa products command higher prices in export markets, local processing will stabilize demand for farmers and facilitate crop financing. By prioritizing ethical sourcing and sustainable practices, we can transform the cocoa sector into a catalyst for positive change in Africa.
At Matta, we’re committed to collaborating with stakeholders to foster growth in Africa’s industries. Thank you for reading! We welcome your thoughts, comments, or questions.
