Nigeria and Cameroon are in talks to create a uniform price for cocoa produced in both countries.
Vice President of the World Cocoa Producers Organisation, Sayina Riman, disclosed this to Reuters on Thursday.
The move follows Ghana and Ivory Coast’s union in July, which set the price for a ton of cocoa from their countries at $2,600 plus a $400 premium described as “living income differential.”
Both countries produced 60 per cent of the world’s cocoa in 2018.
Riman said, “We are talking to Cameroon to see if we can become a regional bloc, and see if we can get our buyers who know our quality to give us better differentials.”
Spokesperson for Cameroon’s trade ministry, Serge Eric Epoune, told Reuters that he is unaware of Nigeria’s plans.
Another source at the country’s National Office of Cocoa and Coffee, who did not want to be named, described talks of such a union as “rumours”.
According to Reuters, the price of a ton of cocoa at the farm rose to around N720,000 naira ($2,353) per tonne from N650,000 naira in September.
This is cheaper than the $3,000 agreed on by the world’s two largest producers.
A trader said that the price of Nigeria’s cocoa produce will rise as a result of market forces even if the country does not increase cost.
The source went on to say the possibility of a price union with Cameroon is unsure, as there is no central cocoa authority in Nigeria.
“I believe the Nigerian and Cameroon prices will move up in line with Ivory Coast and Ghana because of supply and demand.
“If Nigeria becomes too cheap, everyone will buy Nigeria and the market will adjust higher automatically, but not because they teaming up.”
Riman, who is also the President of the Cocoa Association of Nigeria, said discussions will be held with the private sector and the Nigerian Government before formal talks are held with Cameroon.