Cocoa arrivals at Lagos ports climbed to 35,500 tonnes in December, up 39 percent on December 2006, an average of estimates by exporters showed on Friday. The increased bean flow is consistent with the positive trend since the 2007/08 main crop began in the world’s fifth biggest cocoa grower in October, after a below-normal harvest a year earlier.

"Many traders were very active in December, they did a lot of buying, so arrivals were better than in December 2006," one major trader told Reuters. Another exporter said December arrivals would have been much higher but for extended public holidays. "The holidays affected business, banks were closed and many people travelled, so the market was not as active as it should have been," the exporter said. November and December are the peak months for Nigerian cocoa.

Total Lagos arrivals in the three months to December rose 27 percent to 78,000 tonnes from 61,500 tonnes in the same period of last season, the estimates showed. Nigeria’s main cocoa crop traditionally runs from October to March, but harvest started a month earlier this season with arrivals in September estimated at 9,500 tonnes. At least 20 per cent of the beans that arrive Lagos are bought by domestic grinders, whose capacity has expanded rapidly in the last three years due to government incentives.

Local processing is expected to grow further this year when more plants are due to become operational.
Around 10-15 per cent of Nigerian output is shipped through the south-eastern port city of Calabar, capital of the remote state of Cross River on the border with Cameroon. Cross River is 300 miles (480 km) east of Nigeria’s main southwest cocoa zone and often overlooked Lagos-based traders, but its output has increased sharply in the last three years thanks to the state government’s campaign to replant aged plantations and start new ones.

Nigeria’s cocoa zones are experiencing the dry harmattan season after months of heavy rainfall, making it easier for growers to harvest, ferment and dry beans and avoid mould. The harmattan, named after strong dusty winds from the Sahara desert, is associated with high daytime temperatures and low rainfall. The conditions have helped check the spread of the fungal black pod disease and eased transportation woes.
Exporters said farmers and Licensed Buying Agents are hoarding beans in the hope the upcountry price of graded beans, which has climbed 7 per cent in the last month to 235,000 naira ($2,006) per tonne, will rise further.

"They are expecting the price to climb above N300,000 per tonne before the end of January, but I don’t see that happening soon," one exporter said.The last time the Nigerian cocoa market touched that level was four years ago, when output from the world’s number one cocoa grower, Ivory Coast was slashed by its civil strife.