West Africa soft commodities outlook

West African cocoa producers Ivory Coast, Ghana, and Nigeria are currently experiencing a strong start to the crop season, with Ivory Coast leading the way with a record-breaking production. Edward George, Head of Group Research at Ecobank, provided insights into the outlook for soft commodities in the region during an interview on CNBC Africa. As the main crop for 2018-2019 nears its end, all three major producers are expected to contribute significantly to the global market. However, the abundance of supply has led to a drop in international cocoa prices over recent months, with a shift from highs of 2,500 a ton in 2016 to 1,600 a ton currently. Despite the price dip, George remains optimistic, anticipating a potential rise in prices in the near future due to a forecasted global surplus or a slight deficit. The industry's resilience will be tested by unpredictable weather patterns, especially during the critical harmattan period, which could affect upcoming mid crops. The key to sustaining and further enhancing production levels lies in addressing inefficiencies within the value chain in Nigeria and Cameroon, where fragmented sectors hinder growth opportunities. By streamlining processes and providing adequate support to farmers, these countries can potentially boost production levels to match previous peak outputs. In the case of Nigeria's cotton industry, while currently a minor player on the continent, the country has the potential to scale up production significantly with the right infrastructure and investment. The sector's revival could open up new avenues for agricultural growth and diversification in the country, creating opportunities for farmers to increase cotton output, particularly in the northern regions. Ensuring fair pricing mechanisms will be essential to incentivize farmers and drive the industry's expansion. Overall, the West Africa soft commodities market shows promise for the future, with opportunities for growth and development across various agricultural sectors.