Nigeria’s cocoa exports are coming under threat from a shortfall of cash to pay laborers and transporters, further straining global supply.
The country’s central bank in October last year announced it would redesign 200, 500 and 1,000-naira notes in a bid to mop up excess cash and rein in inflation.
As much as 2.1 trillion naira (US$4.61 billion) has been returned to banks, and the policy has led to a severe shortage of bills as people have been unable to get new notes after depositing their old denominations.
Photo: AP
For the cash-dominated cocoa industry, the crunch has left farmers unable to hire workers and exporters without money to get the crop to ships.
The world’s fifth-largest producer of the chocolate ingredient risks not being able to ship as much as 27,000 tonnes this month, Cocoa Association of Nigeria president Mufutau Abolarinwa said on Wednesday.
“We don’t have a quantum of the new notes now to pay for all the services like grading fees, handling charges, freight and some other sundry charges — all of which we usually pay in cash,” Abolarinwa said.
The situation could further compound the supply concerns that have lifted London cocoa prices to a six-year high.
Futures surged more than 6 percent this week amid reports of bean shortages in top grower Ivory Coast, fueling worries that some exporters there might default on contracts.
Upcoming cocoa plantings might also be disrupted as landowners cannot get enough cash to cover workers’ daily wages, spurring a shortage of farmhands to clear and weed farms, said Atangba Bonjor, a cocoa farmer in Ikom in southeastern Nigeria.
Nigeria’s cocoa exports have already slumped as poor weather and fungal issues hampered the main-crop harvest. The country shipped 33,176 tonnes in December last year, while last month’s export figures have not been released.
The cash shortfall is affecting fresh deliveries, said Isaac Arayela, a manager at the Ile-Ife Cooperative Produce Marketing Union, a cocoa-farmer organization.
“We have no cash to pay our members for their cocoa supplies and they won’t accept bank transfers,” Arayela said.
Up to 500 tonnes of the union’s produce is stuck in warehouses, he said.
Many exporters are suspending activities due to the challenges, said Kunle Ayoade, managing director of Agrotraders Ltd, a cocoa exporting company.
Shippers often pay 100 naira per bag to laborers who load the beans on trucks bound for ports and an additional 100 naira to unload them on ships. Truck drivers are also paid in cash.
“Staff spend hours in bank queues to obtain cash, which in most cases is not available,” Ayoade said.
In other commodities:
‧ Gold for April delivery fell US$1.60 to US$1,850.20 an ounce, down 1.29 percent from the previous week.
‧ Silver for March delivery rose US$0.01 to US$21.72 an ounce, but was down 1.63 for the week.
‧ March copper fell US$0.03 to US$4.11 a pound, but was up 2.24 percent weekly.
Additional reporting by AP
UNCONVINCING: The US Congress questioned whether the company’s Chinese owners pose a national security risk and how the app might influence young users TikTok chief executive officer Shou Chew (周受資), confronted with an unforgiving, distrustful US Congress, tried to give answers in his testimony on Thursday that avoided offending either the US government or China. However, his evasiveness left Congress unsatisfied, with representatives hungrier than ever to punish TikTok for ties to its parent company ByteDance Ltd (字節跳動), based in Beijing. He did not bring his company any closer to a resolution. Politically, TikTok is in a tougher spot. Its executives had been discussing divesting from ByteDance to resolve US national security concerns, people familiar with the matter told Bloomberg. However, China this week said
Microsoft Corp has threatened to cut off access to its Internet search data, which it licenses to rival search engines, if they do not stop using it as the basis for their own artificial intelligence (AI) chat products, people familiar with the dispute have said. The software maker licenses the data in its Bing search index — a map of the Internet that can be quickly scanned in real time — to other companies that offer Web search, such as Apollo Global Management Inc’s Yahoo and DuckDuckGo. Last month, Microsoft integrated a cousin of ChatGPT, OpenAI’s AI-powered chat technology, into Bing. Rivals
Sanofi SA’s drug Dupixent succeeded in a late-stage trial for chronic obstructive pulmonary disease (COPD), raising the odds that the blockbuster would be the first biologic medicine cleared to treat the lung disorder. Dupixent, which is already prescribed for asthma and some skin conditions, showed a 30 percent reduction in the rate at which patients’ COPD worsened compared with those who received a placebo during the stage-three Boreas trial, the company said in a statement yesterday. The positive data could herald a new era of cutting-edge treatments for the life-threatening respiratory affliction and provide another major boost in demand for the French
SEMICONDUCTOR EQUIPMENT: The international trade group said the sector would recover from a slump, with spending expected to rise 4.2 percent to US$24.9 billion Taiwan is to retain its position as the top spender on semiconductor front-end equipment and facilities next year, with spending expected to increase 4.2 percent year-on-year to US$24.9 billion, international trade group SEMI said yesterday. The spending forecast matches an expected recovery in global semiconductor equipment and facilities investment next year, it said. International equipment spending is to return to growth next year, SEMI said in a report, forecasting 21 percent growth to US$92 billion. The expansion would manly be driven by robust demand for semiconductors in the automotive and high-performance computing segments, the association said. “This quarter’s SEMI World Fab Forecast update
RSS