Nigeria’s cocoa processors are struggling to benefit from the recent cocoa price collapse, with the industry failing to capitalise on cheaper raw materials after prices plunged 83 per cent from 2024 peaks.
The price drop, which has seen cocoa trade around N2.5 million per metric ton from a 2024 peak of N15 million, ought to have boosted profit margins for local grinders. However, processors say operational challenges and infrastructure constraints are hampering efforts to take advantage of the low cocoa price.
BusinessDay reported that Akin Laoye, executive director of FTN Cocoa, explained that the slump in cocoa prices has reduced operational costs for processors. However, he noted that low demand, high energy and logistic costs have reversed the supposed gains. “Before now, we spent 30 percent of our operational costs on power generation, but the recent surge in diesel prices has increased it to 35 percent,” Laoye said. “We use three trucks monthly to power our factory, and a pump price has now surged by 85 per cent, combined with other operational costs that are also rising,” he noted. “We aren’t gaining from the low cocoa prices,” he added.
The escalating Iran war is taking a toll on Nigeria’s economy, with oil prices skyrocketing and energy costs surging due to the closure of the Strait of Hormuz and attacks on oil and gas facilities in the Gulf region. The war has restricted around a fifth of global oil and LNG shipments, causing fuel and diesel price hikes in Africa’s most populous nation. Depot prices of Automotive Gas Oil (diesel) have surged by 85 percent from N970 before the war to N1,800. This sharp increase has raised operating costs for factories dependent on diesel-powered generators.
Laoye explained that processors are unable to mop up cocoa, as Licensed Buying Agents (LBAs) who bought the beans when prices were higher are stockpiling and unwilling to sell in anticipation of improved pricing.
Felix Oladunjoye, chairman of Cocoa Processors Association of Nigeria (COPAN), stressed that the current low prices of the beans have created an opportunity to scale local processing of the commodity. He explained that most of the country’s processors do not buy the beans six to eight months ahead like their counterparts abroad, but source beans closer to current spot prices. This, he noted, placed them at an advantage, but the huge debt burden is making the industry miss out. “Most of our cocoa factories are down with debt and do not have the required finance to gain from the current low cocoa prices,” he said, stressing that those with the capacity to restock at current spot prices are struggling with high energy costs. “This would have been a time for processors to recoup the losses they have recorded in time past, but the surge in energy, logistics and others is not making it possible,” he noted.
Processing cocoa derivatives – to cake, butter, liquor and powder – locally rather than exporting raw beans generates two to three times more value per ton, according to the International Cocoa Council (ICCO). Nigeria is the world’s fourth top grower of cocoa with 315,000MT, ICCO said in its third quarterly production bulletin in September 2025. Nigeria has only five surviving cocoa processing plants in operation, which have a combined utilisation capacity of 20,000MT per annum, according to COPAN.
During the 2024 and 2025 cocoa price rally, processing deteriorated sharply and processors margins compressed, making several factories barely viable and many shutting down production. While there are no reliable data on the country’s processing volumes, global grindings fell 4.3 percent year-on-year to 4.60 million metric tons in the 2024–2025 season, according to ICCO, as higher input costs squeezed profitability. Barry Callebaut, the world’s largest industrial chocolate manufacturer, reported a 22 percent drop in cocoa sales volumes over the same period, while its shares lost nearly half their value at the peak of the crisis.
Lawrence Afere, founder of Springboard Farmers’ Co-operative of Nigeria and maker of Tiwa Chocolate, said the current low cocoa prices present an opportunity for Nigerian processors to scale operations and bounce back to profitability. However, he noted that with the current realities in the industry, processors will be missing out on a piece of the pie.
