By Obafemi Oredein
Special to Dow Jones Newswires
IBADAN, Nigeria–Cocoa-industry activities in Nigeria are being hindered by a nationwide strike called by the country’s two main labor unions, industry officials and traders said Wednesday.
Cocoa grading has stopped in some cocoa-producing states as public service workers have joined the strike–which is now in its second day–while commercial banks have closed, making it difficult for cocoa merchants and exporters to access funds to purchase cocoa.
According to produce laws, it is illegal to buy, sell or export ungraded Nigerian cocoa, trader Adebayo Salami said.
The strike, called by the Nigeria Labor Union and the Trade Union Congress, is protest against the alleged treatment of NLC President Joe Ajaero and other members of the labor unions in southeastern state of Imo as well as other issues with the Nigerian government.
The federal government in May removed a subsidy on gasoline while the Central Bank of Nigeria in June announced the float of the naira currency against the dollar and other global currencies in an attempt to unify exchange rates in the country.
The float has led to the depreciation of the naira against the dollar by over 40% since June. The move also resulted in the cost of gasoline tripling while cost of diesel has more than doubled, leading to a rise in the cost of electricity, food, housing and other essential goods and services.
“If the strike continues for more days, interstate transportation of cocoa may become difficult while moving cocoa from the hinterland to the warehouses of exporters in Lagos will cost more. This could add to the operations costs in the cocoa sector and result in delayed arrival of cocoa at the ports for export,” said Salami.
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