Nigeria's ambition to boost cocoa production and strengthen its position in the global export market is facing challenges from sharp price swings and tougher environmental requirements. According to the Cocoa Research Institute of Nigeria (CRIN), cocoa prices in producing states fell sharply in the first quarter of 2026 before recovering from mid-year. This volatility has significant implications for farmers and traders who are exposed to movements in both domestic and international markets.
CRIN's January survey reported an average cocoa price of N6,893 per kilogramme across seven surveyed producing states. However, by March, the average price had dropped to N3,579 per kilogramme, representing a 48 per cent decline. The prices ranged from N4,250 per kilogramme in Abia to N7,750 per kilogramme in Kogi and Ondo in January. The subsequent recovery saw prices increase to N5,767 per kilogramme in August, with Ondo recording the strongest monthly increase of 16 per cent.
The price movements have occurred against a changing global cocoa balance. The International Cocoa Organization (ICCO) estimated 2024/25 global cocoa production at 4.733 million tons, up 8.5 per cent year-on-year, while grindings fell 3.3 per cent to 4.649 million tons. This resulted in a global surplus of 37,000 tons, a major reversal from the 494,000-tonne deficit recorded for 2023/24.
ICCO estimated Nigerian production at about 330,000 tons for 2024/25, with Africa accounting for about 69 per cent of global cocoa production. However, the challenge facing Nigeria's cocoa industry extends beyond production and prices. The European Union's Deforestation Regulation (EUDR) will begin applying to large and medium-sized operators from December 30, 2026, and to certain micro and small operators from June 30, 2027.
The EUDR requires operators to demonstrate that cocoa and relevant cocoa products are deforestation-free and produced in accordance with the legislation of the country of production. Experts note that the EU is taking the safety of its consumers seriously, and requirements like the physical origin of cocoa are becoming increasingly important. Operators must provide information needed for due diligence, including the geolocation of production plots.
Companies like Mondelēz International have already made significant strides in ensuring sustainable cocoa sourcing. Approximately 100 per cent of the cocoa volume sourced for its chocolate business was covered by its Cocoa Life programme, which includes forest protection and restoration among its sustainability objectives. The programme has more than 257,000 registered farmers.
The impact of the global price correction has been filtered through different national pricing systems across West Africa. As Nigeria navigates these challenges, stakeholders will need to adapt to the changing landscape to ensure the country's cocoa industry remains competitive. The country's cocoa sector must address issues of price volatility, deforestation, and sustainability to maintain its position in the global market.
Key points
- Nigeria's cocoa production faces pressure from sharp price swings and deforestation regulations.
- The European Union's Deforestation Regulation will begin applying to operators from December 30, 2026.
- Companies like Mondelēz International have made significant strides in ensuring sustainable cocoa sourcing through programmes like Cocoa Life.
