Looking for an export business idea?
There are over 100 agricultural items you can export from Nigeria but if you are looking for an industry where the network of the business is over $900m and 309th most traded product in the world, then let me introduce you to cocoa export business in Nigeria
Cocoa bean export in Nigeria is one of the most important agricultural export product. It used to be the mainstream income of the western region of Nigeria before the oil boom and till today, it is still a major export item.
In this article, I will be sharing with you some important things you need to know. Here you will learn how to start a cocoa export business in Nigeria.
Where Do Cocoa Beans Grow
Cocoa bean grows on pods on the tree species called Theobroma Cacao. They grow in the humid and hot region of Africa and in some countries like Asia, South and Northern Africa. When the seed is planted, Cocoa can take about 5 years to mature and a single tree can remain productive for more than 25 years.
Major Cocoa Producing Companies
Cocoa is produced in a lot of countries in Africa but the concentration of the product is in West Africa. Major cocoa producing countries include Cote d’Ivoire, Ghana, Nigeria, Cameroon and this four countries produces 70% of the total cocoa production in the world.
The top 10 countries producing cocoa in the world are:
- Ivory coast ($3.75B)
- Ghana – $1.98B
- Nigeria – $504M
- Cameroon – $578M
- Ecuador – $742M
- Dominicis Republic
The top producing states in Nigeria are:
- Ondo state
- Cross River
- Akwa ibom
Top Countries That Imports the Most Cocoa Seeds
- USA- $1.38B
- Netherland – $2.2B
- United Kingdom
- Czech Republic
- Malaysia – $728M
- Germany – $886M
Here are some interesting cocoa farming and export statistics:
- 2016 – Nigeria produces 200 million metric tone of Cocoa
- The average price of cooca per US/tonne is $2004.46 – source
Infographic by IFC Markets
Now that you know a lot more about the cocoa industry, let us start our journey towards exporting the item from Nigeria.
Immediately, you are interested in exporting cocoa, there are two major associations you need to become a part of. The first of them is the project 6 by 6000 export project by the import-export business company in Nigeria, 3Timpex, a trade consulting firm in Nigeria and the second is the Cocoa Association of Nigeria.
The cocoa association of Nigeria is the umbrella body representing all the stakeholders in the cocoa export industry. It was established in 1986 to serves the function of fostering of growth in the industry, empowering farmers and promoting knowledge and development in the industry.
Finally ready for a step by step guide exporting cocoa from Nigeria?
Let’s dive in.
How To Start Cocoa Export Business in Nigeria
The first thing you need to know when you want to start the cocoa export business is to identify where you can get the product from. Like I said above, cocoa is produced majorly in West Africa. If you are in Nigeria, you can buy the product from some states in Nigeria like Ondo state.
You also need to research the method of payment, transportation, packaging and the correct specification for exporting. Specifically you need to do a market research.
- Source Your Products
Since you will be involved in commodity market, you need to know how to source your product. This includes making sure that the product meets the required specification for the exporting of the product. This includes building relationships directly with farmers of the products.
- Know the Rules for both countries
Next is to know the rules for both countries. Know what is needed to take the product out of your country and also into the export country of your choice.
- Create a business plan
The next step in the process is to create a solid business plan for your business. Most people fail not because they do not know what they are doing but simply because they do not have a good business plan. Your business plan will include a lot of thing but the core concept will hover around how you want to source your product, get the product to the buyers amongst other things
- Finally start small to be able to manage the risks.
Every business comes with its own risk and the exporting of cocoa product is not an exception. The best way to start the business is to start small so that you are able to manage the risks. Then as you gain more experience, you can begin to expand the scope of your business.