CASHEW NUT EXPORTATION BUSINESS GUIDE FROM NIGERIA

Nigeria is one of the top ten producers of cashew in the world. Cashew is a smallholder crop and supplements the incomes of thousands of farmers across 18 states of the federation. By far, the U.S is the largest buyer of cashew kernels followed by the Netherlands. 

THE National Cashew Association of Nigeria, NCAN, once said, Nigeria earned N144.7 billion ($402 million) from the export of raw cashewnuts to Vietnam and other countries in 2017.

Nigeria currently, is the 6th largest producer of cashew nut in the world. There is so much potential within the cashew industry. However, with the potential comes the need for a good understanding on how the industry works.  Cashew is a perennial crop that grows seasonally. Unlike other fruits, its seeds are externally attached to the flesh of the cashew fruit.

WHY EXPORT CASHEW NUTS

Cashew nuts have significantly contributed to Nigeria’s revenue generation. Due to cashew nuts high nutritional value, demand currently outweighs supply. Currently Nigeria is unable to meet up export demands, i.e.  The global demand for cashew. Hence, cashew value chain currently engages a lot of participants among farmers. This is therefore good news for investors. However, to benefit from this, knowledge is key.  Starting cashew nut exportation business in Nigeria requires the right knowledge.

Below shows all the steps and processes involved in cashew nut export.

CASHEW FARMING

It is expedient to note that not everyone wishing to start cashew nut exportation business needs to grow a cashew plantation farm. However, starting a cashew nut farm is serious work which would reward you financially in the long term. Starting a cashew plantation requires a lot of time (usually several years) before it starts producing cashew. It all begins with making a nursery where the seeds grow to young trees and later transplanting them to their permanent location, a gradual process of growth commences. These trees are taken care of until they are mature to grow without watering.

CHOOSING THE END PRODUCT FOR EXPORT

There are a number of end product of cashew that revolve around cashew nut exportation business. Raw cashew nuts and cashew nut shell liquid are the two main products that have a great demand in international market.  There are other two cashew products namely cashew kennels and cashew apples. Cashew kennels are also sold in world market; the USA is the leading consumer of it.

Starting an exportation business requires you to decide the end product you would make the most impact on.

Cashew nut business has an attractive value chain where you can focus your attention on. You may want to process your cashew nuts before selling, or just selling them directly. Whatever the case, knowing the right strategy that will yield the highest financial reward is important. Processing these nuts significantly increases the market value. 

SEEK  INVESTMENT GUIDANCE

To start well, it is important to get guidance from the right sources. The Cocoa Research Institute of Nigeria (CRIN) Ibadan,  is a good place to start from. By doing this, you will have significantly lowered the chances of failure in your intended business. CRIN has carried out a lot of research in this regard; hence, it is the right body to approach. An important aspect of the research conducted by CRIN is that you get to know the sources of demand (both domestic and foreign). This makes exporting of these cashew nuts easier.

 

SOURCE FOR PRODUCT FROM WHOLESALERS/FARMERS.

In Nigeria, due to high demand of cashew nut in the international market, a lot of farmers are currently engaged in cashew nut plantation. Before you can start the exportation of this product, you need to source for these the products from farmers all over Nigeria. To make work easier for you, you can visit some of the research institute such as Cocoa Research Institute of Nigeria CRIN and National Cashew Association of Nigeria (NCAN). These bodies and their representative are well informed about the sources of these products and the states where interested investors can get cashew fruit in large quantity.

 

REGISTER YOUR BUSINESS

Registration of a product gives identity to the products and the company making the products. It also protects the adulteration or imitation of the product. So while starting the business of cashew nut processing, you will need a number of registrations as well as licenses from Government and its agencies, both at the national and state levels. However, registration depends on your scale of operation (scale of operation will be further explained below). Gaining official approval enables the business to function at a much bigger capacity. Registered agro-allied businesses stand to benefit from a lot of incentives. You may want to take this serious as a new start-up will require all the breaks it can get to enable it stabilize. Domestic and foreign supply requires you to have a license obtained through registration. The Corporate Affairs Commission (CAC), National Agency for Food, Drugs and Control Agencies (NAFDAC) are examples.

SEEK MARKET PROSPECTS

There is no business without patronage and potential customers for it. All over the world the demand for the cashew nut is speedily growing. Many countries of the world indulge in consuming, processing, producing and exporting of cashew nuts. It’s one of the major agricultural products that is imported and exported in many countries. You may need to make a personal research and outsource for customers in different countries of the world.  Note that the major export destination of raw cashews from West Africa is India and Vietnam, which are two most significant importers of raw cashews and biggest exporters of shelled cashew. Therefore, you may find cashew nuts buyers in Vietnam. These days, there are many online platforms with a huge database of product real-time market trends and profiles of suppliers and buyers. Using online platforms can be of great help.

SCALE OF OPERATION

Your scale of operation in exportation is dependent on your financial strength. First consider your financial strength and pattern your business according to available resources. Failure to do this could make your business fall on hard times (financially) in the nearest future. Having an under-funded business is not what you should wish for as it has the ability to cripple you business.