Nigeria will rake in more income from cocoa market when consumption trend changes locally

The Oloni of Eti-Oni, Oba Dokun Thompson is a veteran cocoa trader whose domain of interaction is the international market. His fervor for the cocoa industry and the issues holding Nigeria back from benefits accruable to producing economies led him to initiate the Annual Cocoa Festival at his hometown, Eti Oni, Osun state. For him, there is a vast potential in the tourism dimension to cocoa that is largely unexploited. He believes the low cultural exposure to cocoa consumption is chief on the register of drawbacks to the exploitation of the cocoa value-chain and local trade. His hope is that this could change with the festival. TEMITAYO AYETOTO brings excerpts from the interview.

Can you take us through the cocoa journey and the Eti-Oni’s role?

To build a new economy, he (Eti Oni) brought in four crops which were cocoa, rice, cassava and kola nut and Eti-Oni started to thrive. But because cocoa was actually imported, it became a product that was sought after by more of the foreign markets. Eventually, people started coming in to Eti-oni after about 20-years.

People came from Oke-Imesi, Ile oluji all the way to Okiti pupa to learn the cocoa trade. After a while people started taking it around and after the colonial period, it spread to Ogun and Ibadan. Then the cocoa research institute was established and the cocoa house was built. And at that time, Nigeria had become the largest producer.

In the 50s and 60s, we created a world class economy in the western region of Nigeria, developed the first television station, had the tallest building in Africa and even the University College Hospital, Ibadan was a state-of-art hospital then whereby you had members of the Royal Family going for treatment. That was the economic power of cocoa but today, we cannot say the same. We have now moved from being the largest producer of cocoa to 5th. Today, West-Africa produces 75 percent of the world’s cocoa production. Ivory Coast and Ghana have very huge production output and their market is much regulated. And that comes with a lot of issues.

In the 70s, the International Cocoa Organization was established by a number of nations within the UN to develop the cocoa economy. They also wanted to develop every aspect along the value-chain but over the last few years, I have noticed that every single cocoa producing region is left for poor but every cocoa consuming region is wealthy.

The entire chocolate industry in the world is about $130 billion and by 2025 it may reach about $172 billion. Out of that amount, West-Africa that produces about 75 percent of that probably earns less than $10 billion. Obviously there is a problem.

When you look at cocoa, you are looking at seven different sectors. You are looking at raw material, the primary sector, the secondary sector and you are looking at it for intermediary products like the cocoa butter, lick-up, powder and cake. Then, the tertiary sector, we are looking at the end products with the chocolate on one side. The tertiary sector of the cocoa industry is divided into about three or four that we are not exploiting: the confectionery, pharmaceutical and cosmetics. On the other side, you have the retail side of it which includes logistics and beyond that, we now also have tourism on one side, education, research and so the potential of that industry is huge. This is what we are trying to bring to the knowledge of everyone in Nigeria and West-Africa.

There is a school of thought that liberalisation of the cocoa market in Nigeria has adversely affected quality and international classification in the hands of independent marketers and perhaps regulatory boards should return. Do you agree?

If you look at the situation in Ghana and Ivory Coast, there is a lot of foreign participation there. But when I say foreign participation, they are not through bilateral arrangement but exploitative ones. People encourage us to copy the Ghana or Ivory Coast style. Only recently, the two countries came together to say they were going to announce the new cocoa price but what has that done for them? At the same time, the Cocoa Board is complaining that their debt is going into a billion dollars.

If the industry is regulated or supposed to be okay, how come they are in debt even though Ghana produces close to a million tonnes a year? Nigeria produces just under 300,000 and it is really not because we are not producing quality cocoa or standard cocoa, it simply means there is a political undertone to either undermine what we are doing to put us in a situation whereby our cocoa industry can also be taken over in a one-way direction which we must not allow to happen. We have to create a situation whereby we have a true bilateral relationship which offers mutual benefit to every single stakeholder involved and we as a community and pioneer are already leading that area by initiating the cocoa festival.

This year’s edition is going to be coming between the 2nd and 9th of December to celebrate peace and love. The entry of cocoa into Eti-Oni was as a result of a peace treaty. Cocoa we see as chocolate and chocolate is a food of love and cocoa was used to build an economic model to develop Eti-Oni and subsequently developed western Nigeria to a first-class economy. Once we can look at the situation properly in Nigeria, and look at ways of improving on standards, then we can have very high quality beans that we can sell at whatever price we want. And the best way is to allow the market forces decide the price rather than fix a price.

The ICCO came up with a list of cocoa producing countries. Some, they defined as fine cocoa producers which means refined flavour or partially flavoured and some they defined as bulk purchase cocoa. Nobody knows how they came about that. In Africa, only Sao Tome and Madagascar are acclaimed to produce fine or flavoured cocoa and I don’t agree with that. If any country has been producing 20,000 tonnes or 10,000 tonnes, prior to 1960, they must have a lot of fine cocoa. We have trees that are 70 or 80 year old. South America is said to produce a lot fine cocoa, how did they come about that? They produce 2 tonnes per hectare averagely or 1.6 tonnes as bulk. Fine cocoa or flavoured cocoa takes about 7 to 10 ten years before you can harvest and at the same time, you harvest them once a year and we have a lot of that even Eti-Oni, Ondo and others.

Fine cocoa pricing today is over $5,000 per tonne while bulk purchase is just over $2,000 per tonne. Fine cocoa is used to produce fine luxury chocolate. So we should not shortchange ourselves based on other people’s definition without any particular specification to guidelines to how they arrive at definitions.  We should always question a lot of things and push forward for proper evaluation and auditing before we agree to certain classifications.

We talk about the pricing, in Brazil, they leave their cocoa and they request for any price they want. But it is not about regulating your pricing or fixing your pricing or making sure it is only cocoa boards buys the cocoa that you create a regulated market. No, you can create a regulation to guide standardisation to guide quality to guide other things that will make your product or your raw beans premium. It is not your pricing, so the Ghana model, the ivory coast model are a problem for their country a problem for the industry and a problem for the continent, because that is why you will see Nigeria cocoa going to Ghana going to Cameroun or vice versa when prices are going up and down. But if everything is left to the market forces, left to demand and supply and when we now start consuming cocoa the price of cocoa is going to go up. It will definitely go up because the quantity of cocoa that will now be available to the outside market will now be reduced,      drastically, what will now happen is that they will now increase the margin to be able to get enough of what they require.

The cocoa association has said flooding will affect the country’s 2018 production, affecting the struggle increase output. What should Nigeria do to ensure it regains its position in the comity of cocoa producing nations?

The flood is affecting everybody particularly this year. Even in Eti-oni, it affected us. Most of the time, from my experience, what usually happen is that heavy rain will always affect us, it is not really the flood but the amount of water over the fruits and over the tree and where the fruits are really affected that has to do with the damage to the pods that reduce the production. That is why I said one of the things we are not really doing is we are not getting involved in research. What we have done is to do a lot of research on production, on reducing the amount of time to producing this amount of time to multiply or increase production per one seedling or per tree. What we are not doing is sometimes there are some fruits that have been developed whereby they sort of prevent pests from destroying them but now the issue of flooding should be another subject on its own and the only way we can prevent that is if research goes into it, and if we say research, we are talking funding.

So everything comes down to funding and fortunately the current director general of CRAN has been confirmed and I want to believe that the more we talk about this flooding issue the more they will now look for ways of immersing cocoa pods into water and it is still comes out good at the end of the day, so it is about research.

Is the Federal Government 10-year cocoa plan the right initiative to develop the industry?

You see, when you don’t grow things organically then you run into problems. What is the benefit of achieving one million tonnes? Is it to bring down the prices of cocoa to $1000 per tonne or to $500 per tonne? They have not achieved 500,000, they are talking of one million, who are the people that will grow these things? Who are the people that will go and harvest them? In 2012-2013, 800,000 to 1 million seedlings were given out for free to cocoa farmers. The production capacity went up then because there was a lot of encouragement but right now it’s like there is a little bit of low in the activities of cocoa production. Don’t let us call it politics; you can create policies and not back it up with actions. When you don’t back that policy with an action that it requires, then the policy is hopeless, it is meaningless. It is about lack of interest.

There are two different things, when you say politics. This problem is internal, there is a cocoa policy. A few years back they were saying they wanted to overtake Ghana and Ivory Coast as the largest producers at that time Ivory Coast was producing about 800,000 tonnes. Today Ivory Coast has moved to 1.2 million per annum. That on its own had its effect. You crash the prices and they lost $300,000 in their cocoa pricing and the farmers were in huge problems. That is on one side but let look at the positive side. They moved from where they were between now and that time that Nigeria set its own at 1.3 million tonnes and at the same time they moved to becoming the largest processor. They have the largest processing capacity in the world overtaking Holland or Amsterdam. Holland use to be the largest processor of cocoa in the world but today Cote I’voire has overtaken them by a margin o 20-30,000 tonnes.

I am not sure by what they mean by wanting to produce one million tonnes. Do we have to be an extractive location? The only thing that can drive our economy is manufacturing; that is what will drive the economy, that is what will add value to the economy, that is what will create jobs and that is what will sustain the industry even the production. If you look at the Netherlands, they have a population of about 15 million people. The amount of people that are actually into agriculture in the Netherlands is only about 7 or 8 percent of their population and it is under a million and yet they export over $65 billion of agricultural produce because everything they do, they add value. Nigeria has a population of 180 million; we have 75 percent of our population in agriculture and we don’t do a billion dollar of export in agriculture. There is a major problem so look at the capacity or the value of each person, each person in the agricultural sector in the Netherlands has the capacity to produce maybe a million dollar or so meanwhile in Nigeria it is like in the deficit.

So if that cocoa plan does not involve very strategic planning whereby it involve not just saying we are going to be producing one million tonnes of cocoa every year, then there is a problem because its suppose to be saying how we are going to add value to it how we are going to rebuild our communities, how we are going to encourage the younger generation into it how we are going to create industries. You can imagine if every single cocoa product we have is producing that. These plans of this policy statement are not going to do anybody any good. What do we need a 10 year development plan for if the main crux of that plan is not about adding value?

How do we improve on the quality of cocoa beans in Nigeria?

When the pricing is wrong, the quality too will be doggie? We have farmers who put rubbish in the cocoa  to improve on the weight because the pricing is wrong not because cocoa board or the Nigerian cocoa industry is. You see when you harvest your beans and the farmers are living decently and are not engaging in sharp practices they will look for that extra N5000 to look for money to pay for school fees. Those things will be eliminated automatically then you will see people now doing things properly.

What exactly is new about the Cocoa Festival at Eti-oni?

There is a soul to our festival. The first day which comes with the harvest day, we do the pot breaking ceremony whereby we ask someone from another region to taste our cocoa and based on it we can look at how we manage our things. The second and third days are dedicated to the farmers’ training. They train in the classroom and the second day; they go on the field to translate what they have seen in the classroom to practical. This year we are introducing something else; bringing someone who is an expert in hand pollination so that we can train our farmers on techniques to be able to multiply the production.

We also have to consider their state. Like I said earlier, every cocoa producing community is left for the poor with lack of basic amenities, social services or infrastructure, Eti-Oni just like Oloibiri is left for poor. Our main objective is to build a sustainable model using the cocoa economy. We are taking cocoa festival around the world to actually build a bridge between production and consumption and encourage true bilateral relationship and even cultural exchanges.

There is tourism aspect of cocoa that is not even exploited. Last year, we had about 8 countries represented across five continents around the world from Asia, South America, Europe and West Africa. That is what agriculture or any cash crop that is not a local product offers you but the biggest challenge the developing the cocoa industry locally in Nigeria is mainly to do with the fact that it is still strange to us and not part of our culture. So the festival is to build a cocoa culture that will imbibe certain opportunities economically and also certain habits in terms of gifting and eating. Last month, we took the festival to a different level by hosting the Annual Royal Cocoa Festival Dinner that was well attended by a number of members of the House of Parliament, House of Lords, House of Commons, many CEOs and managing directors of various chocolate companies in the UK. It is becoming interesting. We have a story and Africans need to tell their stories. With that I also wrote and compile a book titled “The Royal Origins and Traditions of Cocoa: Eti-Oni”. It is to develop tourism and help inculcate that cocoa culture in Nigeria.

The publisher of Kennedy Confections, the oldest confectionery magazine in the UK has partnered with us. He will be coming in to Eti Oni for the festival. He is coming to experience the life of a cocoa farmer in Nigeria. He is going to be living in Eti-Oni as a labourer as a way of educating the world particularly the cocoa consumers on the value of cocoa production and the value of the lives of cocoa farmers because right now it appears that cocoa farmers do not have a life, do not really exist and cocoa farming may just be anything.

The value of chocolate to the value of cocoa is about 1 to 20. In some cases, it is even worse. We are not saying we should reduce that price but what we are saying is let’s move up that value chain to turn the communities around and create sustainability. The challenge today is being able to achieve sustainability in cocoa production. The average age of the cocoa farmer is about 45 to 55. The cocoa farmer is an aged population and to be able to sustain production, you need to bring in the younger generation and before the younger generation can be involved, it means they must be encouraged to be able to cultivate in an environment that is comfortable. It means they need decent housing schools, proper education, healthcare and several things that will create opportunities for them even within their closed community but right now everybody wants to run out of those communities because they are left for close-to-dead.

I was at a conference in October titled “A World without Choclate”. I was on a panel that spoke on your trees are dead, what now? For me, even before our trees are dead, the communities are almost dying and if those trees actually die, it means death to these communities. I am not talking about cocoa producing communities but cocoa processing communities, chocolate business communities, chocolate logistic communities and other communities that are involved with the entire value-chain or supply-chain to the consumer. It means over $200 billion wiped out of the world economy. It means a global economic c crisis. When they start seeing it like that, we will then know that to achieve sustainability and to prevent global economic crisis, something urgent needs to be done by creating true bilateral relationship that are mutually beneficial to every single stakeholder along the value-supply chain.