Optimising potential of cocoa industry

Cocoa is one of the key high-value commodities traded worldwide given its wide application in the food and cosmetics industry. At a point it was the main foreign exchange earner for the defunct Western Region, but the industry’s growth has since been hampered by the focus on the oil industry. EMMANUEL OGBONNAYA makes a case for the rebirth of the cocoa sector.

Today, chocolate is one of the most commonly craved foods in the world, making it a huge gold mine for countries and investors who are active participants in the cocoa value chain. Initially, chocolate was thought of as a luxury item and because of its high price, was replaced by coffee and tea as the main drink in many homes. However, ultimately, chocolate did become a favourite confection in most developed countries including Europe and North America.

Nowadays, cocoa is grown mainly in West Africa, Indonesia, and Sri Lanka. One of the ways in which cocoa consumption and the entire industry in general can be promoted in Nigeria is through a Cocoa Day, which should be an annual event to promote local processing and consumption of cocoa.

Nigeria is renowned for her creativity and nothing stops the promotion of local consumption of cocoa benefitting from an array of creative ideas across the spectrum of society including public schools and health institutions. Nigeria’s sister nation, Ghana already is well- advanced in this aspect where Cocoa Day has been celebrated since 2005.

According to the World Cocoa Foundation (WCF), there are nine stages involved in the cocoa value chain namely: growing, harvesting, fermenting and drying; marketing, packing and transporting; roasting and grinding; pressing, chocolate making and then the consumer. Interestingly the cocoa, chocolate and confectionery industry around the world is a key user of other agricultural commodities such as sugar, dairy products, nuts and fruits.

It is on record that for every dollar of cocoa imported into the U.S, between one and two dollars of domestic agricultural products are used in the making of chocolate. Chocolate manufacturers are the second largest users of sugar in the U.S and the value of sugar consumed in chocolate manufacture is $800 million annually. As Nigeria embarks on backward integration for sugar, it is pertinent to note that neglecting value addition in cocoa will be to its own loss.

According to industry reports, only about 20 per cent of Nigeria’s cocoa output is processed locally; the rest is exported as raw beans. Although the sector is not without its challenges such as high costs and insufficient supplies of raw cocoa beans to Nigeria’s eight local processing factories, low capacity utilisation, high operational costs of energy and spare parts. Inconsistent policy is also a major headache.

At a recent forum attended by Nigeria’s Minister for Industry, Trade and investment, Mr Olusegun Aganga, he said that, “No nation can rely on the export of raw materials because it does not make economic sense because value addition is the backbone of industrialisation.” He stated that government is currently driving “an industrial revolution” and regards cocoa processing as a veritable channel to boost Nigeria’s industrialisation. Indeed his commitment was demonstrated with the setting up of a Committee for the Roadmap for Cocoa Industrialisation. Of all the links in the cocoa value chain, processing is the most capital intensive accounting for at least 90 per cent of the total direct investment in the cocoa economy. An average medium sized Cocoa Processing Factory (10,000 metric ton capacity) requires a capital outlay of not less than N2 billion in plant and machinery and another minimum of N1 billion as working capital. The estimated total direct investment in the eight factories in operation in the country today is put at about N27 billion. In order to create more value for the industry and the economy, there is need for a proactive promotion of the local consumption of cocoa based products such as chocolate bars and beverage drinks in Nigeria; a critical factor which must no longer be treated with levity.

The health and nutritious values must also be part of the message to Nigerians to prompt them into understanding the benefits. According to a recent BBC report “Drinking cocoa every day may help older people keep their brains healthy. A study of 60 elderly people with dementia found two cups of cocoa a day improved blood flow to the brain in those who had problems to start with.”

Chocolate also induces positive effects on mood and is often consumed under emotional stress. Numerous studies have suggested beneficial effects of cocoa in cardiovascular diseases (CVD). Most recently, Zomer et al. concluded that the daily consumption of dark chocolate could be an effective cardiovascular preventive strategy in patients with metabolic disease. It has also been acclaimed to lower blood pressure in healthy subjects as well as in young and elderly hypertensive patients.

However, recent efforts by the Ministry of Agriculture and Rural Development point to a new dawn for the cocoa industry at least from the growers’ side with the commencement of the Cocoa Growth Enhancement Support Scheme on Wednesday to resuscitate the cultivation of the cocoa in the country, staring from Ondo State.

The Minister of Agriculture, Dr Adewumi Adesina, who commenced the scheme in Akure, said not less than $900 million was realised from the export of cocoa in 2012.

Represented by Mr Rufus Omakinwa, a Director in the ministry, Adesina said that about three million hybrid pods of cocoa were distributed to farmers and other stakeholders in cocoa growing states in 2012. “It is on record that hybrid cocoa can start fruiting within two and half years after planting. “Rehabilitation of old cocoa farm is encouraged while establishment of new plantations are being focused upon.

“The Federal Government has set a target for cocoa by doubling the national cocoa output to 500,000 metric tonnes through improved farmland productivity. “This will build farmers’ capacity in agricultural and business practice to improve income of 250, 000 farm households,’’ he said. Adesina said fungicides, insecticides and formulated fertilisers, had been packaged for the farmers.

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