The worsening wave of COVID-19 cases in significant global economies increased concerns among cocoa traders.
Cocoa prices are going lower as the resurgence of coronavirus around the world threatens global chocolate demand. At the last trading session, which was in September, cocoa prices closed at $2,164.50.
As a result of weakening cocoa demand globally, the price of September cocoa futures dropped to $2,159 per 1000kg, nearing a one-year decrease in cocoa price, before stabilising above its support levels.
Chocolate is often considered a luxury product, meaning that in times of high economic uncertainty, the consumption of such products will falter as consumers focus more on necessity goods.
However, officials in Nigeria remain optimistic as the country recorded a surge in revenue because of cocoa. President Muhammadu Buhari stated that Nigeria’s income from cocoa and sesame seeds has increased by $79.4 million and $153 million, respectively, in the last year.
Nigeria has a leading role in the cocoa industry, covering a 6.5% share of global cocoa production. According to the National Export Promotion Council, Nigeria is the fourth largest exporter of cocoa beans, behind Côte d’Ivoire, Ghana, and Indonesia. Cocoa exports in Nigeria are projected to grow annually by 4% in the following years.
