Nigeria’s Shea Nut Prices Drop 33% After Export Ban

The price of shea nuts in Nigeria has plunged after the government banned exports, with the product selling for N800,000 a tonne, down 33 per cent from a few days earlier, a report by Bloomberg has revealed.

President Bola Tinubu had said the six-month moratorium on shipments was needed to “secure supply for local processors, create jobs, and protect a value chain where 95 per cent of pickers are women.”

The ban, the report said, is expected to have serious financial implications for major exporters, with some seeing it as an opportunity and others being skeptical that it will have a positive effect in the short term.
Shea nuts, which are used in cosmetics and confectionery, fell to the new price of approximately ($521) a tonne at the close of trade on Thursday, Bloomberg said, quoting the Chief Executive Officer of Lagos-based Vestance, Rildwan Bello. The consultancy firm tracks agricultural commodity prices.

While the move was well-intentioned, there would be serious financial implications for major exporters, who now face defaulting on contracts, Bello said.

“Exports made the market vibrant. Local demand is not as high as local supply,” he told Bloomberg by phone from Lagos. “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,” he added.

The slow-growing trees that produce shea nuts are indigenous to West Africa. Nigeria produces about 500,000 tons of the nuts annually, government data showed. Burkina Faso, Ghana, Mali, Ivory Coast and Togo – all of which restrict exports to promote local processing — are the other main producers, the report added.

Shea butter can be used as a substitute for cocoa butter and US regulators have granted approval for it to be added to baked goods and moisturisers. Two leading global producers of plant-based oils— Dutch company Bunge Loders Croklaan, a subsidiary of Bunge Ltd., and AAK AB — produce the butter in West Africa, with the former operating a processing plant in Ghana from 2019.

Since taking office in May 2023, Tinubu has sought to generate jobs by restricting the sale of raw materials to other countries. The ban on nut shipments will help correct an imbalance whereby the country produces nearly 40 per cent of the world’s supply, yet captures less than 1 per cent of a $6.5 billion global market, he said.

Chief Executive Officer of Lagos-based beauty products company Shea Origin, Mobola Sagoe, said 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.

Emmanuel Addeh

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