Palm oil is the most versatile of all vegetable oil. Palm oil is used in large volumes across various industries such as food, personal care and biofuel industries. It is known to be an excellent source of calcium and the least allergic to all edible oil. The usefulness of palm oil is what makes it have a huge demand-supply gap and opens up opportunities for investors and those interested in exporting palm oil from Nigeria.
There is also much evidence that the demand for palm oil in industries and homes will continue to increase. Palm oil is the most common cooking oil and considered the best oil for frying. When palm oil is not being used for food, it is an important raw material in the production of soaps, detergents, greases, lubricants and candles. The versatility of palm oil makes it a highly sought-after commodity in homes, restaurants and food processing industries. The various categories of industries that make use of palm oil include cosmetics, food, animal feed, soap manufacturing, confectioneries, and bio-diesel. These industries use palm oil in making other products. The exportation of palm oil is a lucrative business with rewarding incomes.
About the Palm oil market
The global palm oil market is estimated to be worth hundreds of millions of dollars annually. Although West Africa lies in the centre of the global palm oil market, it produces less than 5 percent of the palm oil consumed globally. The palm oil industry has huge potentials for return and you can also tap into this market.
How to start exporting palm oil from Nigeria
Understand the international market
The exportation of palm oil from Nigeria to other countries is a lot different from selling it in the local market. You will need to understand the ropes of the exportation business well so you will not fail. Aspects you will need to understand about the exportation business include requirements for a license, where and how to source for products, port processes, marketing strategies, how to find foreign customers, maximize profits in business deals, etc. This article provides you with information on the above points of concerns and lots more.
Sourcing the palm oil
Your first point of concern is determining where to source for palm oil. The questions are:
Will you be processing the palm fruit into palm oil by yourself?
Will you buy the already processed palm oil?
If you intend to go for the already processed oil, then you have to be sure of where to purchase the palm oil at the best quality and at the cheapest price so you can get maximum profit. Ensure you have the contacts of people who are already in the business and who can link you up with a consistent supplier or manufacturer who will be able to provide you palm oil in and out of season. A good place in Nigeria to source for suppliers of palm oil is Akwa Ibom State. Akwa-Ibom state is currently the largest producer of palm oil. Other states that produce palm oil in large quantities include Cross River state, Rivers state, Abia state, Imo state, Ondo state, Edo state, Delta state, and Bayelsa state.
To go into the exportation business in Nigeria, you will need to get the required documentation. These documents include company registration, quality assurance and commercial documents, shipping documents, etc.
Register the company
Registering your company is compulsory if you want to export goods from Nigeria to other countries. If it is only an individual looking to export palm oil, he or she could register as a sole proprietor. A medium or large company can incorporate as a Limited Liability Company.
Requirements for registration of business with the Corporate Affairs Commission
- The company must have at least two members, but no more than 50 members.
- The members of the company must be at least 18 years old (If two of the members are above 18, others may be younger)
- All members of the company must be of sound mind, never must they have been disqualified by CAMA or bankrupt.
- The minimum share capital of the company must be at least N10,000.
Other documents required for company registration in Nigeria include:
- Notice of address of your business
- Articles of Association and Memorandum
- Receipt of payment of stamp duties
- Particulars, list, and consent of the first directors of the company
- Statement of compliance by a legal practitioner
The Nigerian Export Promotion Council
To start your palm oil exportation business, you will need to register with the Nigerian Export Promotion Council. These council will provide you with viable information on best practices and regulatory requirements for exporters. Members also get privileges such as access to foreign buyers. The council also provides you the opportunity of meeting with people who are experienced in the business. Get the contact of someone who has been in the palm oil exportation business for a very long time and who has proven successful. You can also inquire from them how to run a successful palm oil exportation business in Nigeria.
Quality assurance certification
Most western countries have very strict rules that you need to comply with if exporting palm oil to them. You must make sure that your palm oil has a quality assurance certification. The label should include the following details:
- Address of processing company
- NAFDAC number
- Date of production/expiration
The product should also be properly packaged and sealed.
The most cost-effective method of transportation of palm oil is shipping. Take proper care to contact a good shipping company that has evidence of experience in exporting commodities. With this kind of shipping company, you will be provided with useful information on how to handle the documentation. Some shipping documentation includes customs, export agencies, etc.
Determine who your buyers will be
Finding customers is much easier than before due to technology. From the comfort of your home, you can negotiate a business deal. Ways you can achieve this is through participation in trade websites, trade fairs, etc.