with agency report
29 August 2018, Sweetcrude, Lagos — About 30,000 metric tons of cocoa scheduled for export are presently trapped on the road’s route to Lagos ports, the Cocoa Exporters Association of Nigeria, CEAN, has said. Lagos as roads in a state of disrepair delay access to ships, the cocoa exporters’ body said.
Similarly, another shipment of 1,760 tons of cocoa butter and cake are also held up in the gridlock to the ports as the economy continues to pay the price for years of neglect of port access roads.
The affected cargoes are either locked down in traffic gridlock or stored in transit warehouses in Lagos.
“A greater part of this travel time is spent at the epicenter of the congestion which is just 6 kilometers (3.7 miles) to the ports,” Pius Ayodele, president of the cocoa exporters’ organisation, said.
Shipment delays are making it difficult for exporters to get credit from banks to finance their operations, according to Akin Olusuyi, president, Cocoa Processors Association of Nigeria, who said 1,760 tons of cocoa butter and cake are held up in the gridlock to the ports.
“Most of them have been in the traffic to the ports for close to three weeks and are still far away from its gates. “The cargoes that would have translated into export proceeds for us are locked up in that horrific traffic,” he said.
Travel time to Apapa and Tin Can Island ports that previously took hours, now takes as much as four weeks as trucks struggle through cratered and water-logged roads to get there, Ayodele, said.
Nigeria currently ranks a joint fifth with neighboring Cameroon among the world’s biggest cocoa producers, with the International Cocoa Organisation (ICO) estimating its 2017-18 output at 240,000 Mt. Access roads to the ports were left to decay by a succession of governments over the past two decades, now slowing everything ranging from cocoa exports to gasoline imports, escalating costs and taking a significant toll on economic activity, according to the Lagos Chamber of Commerce and Industry.
Haulage costs have gone up by “about 400 per cent because of the turn-around time to get to the ports, to get loaded and get out of the ports,” Director-General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, said in an interview in Lagos.
This will either erode the profit margins of companies or get passed on to consumers, Yusuf said.
Farm-gate cocoa prices have dropped as purchases have slowed because of the difficulties in reaching the ports, according to local buying agents.
Prices have fallen from N800,000 ($2,208) per ton in July to N640,000, according to the Managing Director, Agrotrack Ltd. Wale Shittu, a cocoa-buying company.
Cocoa futures closed Friday at $2,364 per ton for December deliveries, after gaining 1.16 percent from the previous day, according to data compiled by Bloomberg.