The price of shea nuts has plunged in Nigeria following the government’s decision to join other West African nations in halting exports. This is according to a Bloomberg report.
According to Rildwan Bello, CEO of Vestance, a Lagos-based company that analyses agricultural markets, the price of the nuts was N800,000 naira ($521) per tonne at the closing of trading on Thursday, down 33% from a few days earlier.
On August 26, President Bola Tinubu issued a six-month prohibition on the export of raw shea nuts.
The prohibition, according to Abubakar Kyari, the minister for agriculture and food security, is intended to “secure supply for local processors, create jobs, and protect a value chain where 95% of pickers are women”.
Kyari said the restriction on shea nut shipments will help redress an imbalance in which the country generates about 40% of the world’s supply but accounts for less than 1% of a $6.5 billion worldwide market.
Bello told Bloomberg that, while the move was well-intentioned, the immediate financial consequences might be severe for exporters who are now at risk of defaulting on current contracts.
“Exports made the market vibrant. Local demand is not as high as local supply,” he said.
“The idea of growing the local industry doesn’t happen overnight. You don’t set up a processing industry within two months. The manner of the implementation leaves a lot to be desired.”
Mobola Sagoe, CEO of Lagos-based beauty products company Shea Origin, told Bloomberg she expects the ban to “halt the massive illegal exportation of raw shea nuts from the country and the sub-region”.
“The decision could not have come at a better time,” she said.
According to the report, Ali Saidu, chief executive officer of Salid Agriculture Ltd, a Nigerian processor, described the moratorium as an opportunity.
“His company aims to sharply increase production of its own shea butter from its plant in central Niger over the next six months,” Bloomberg said.
Adesuwa Akinboro, country director of TechnoServe, a US-based NGO that works to help smallholder farmers in middle- and low-income nations raise their revenues, questioned the policy’s effectiveness.
Akinboro stated that the prohibition will initially shrink the market and result in lower incomes, but that six months is insufficient to gain the full benefits.
