Shea Nut price drops by 33% days after Nigeria’s export ban
The Nigerian government’s recent decision to impose a six-month ban on shea nut exports has sent shockwaves through the local market, resulting in a significant decline in prices. This move, aligning Nigeria with other major West African producers, is a strategic effort to bolster local processing capabilities, create employment opportunities, and empower women within the value chain.
The price of shea nuts, a crucial commodity used extensively in the cosmetics and confectionery industries, plummeted by 33% to 800,000 naira ($521) per ton at the close of trade on Thursday, just days after the export ban was announced. Rildwan Bello, CEO of Vestance, a Lagos-based consultancy specialising in agricultural commodity prices, confirmed the price plunge to Bloomberg.
President Bola Tinubu, in justifying the moratorium, emphasised the need to “secure supply for local processors, create jobs, and protect a value chain where 95% of pickers are women,” aligning with the administration’s commitment to fostering domestic industrial growth and improving the livelihoods of a significant demographic involved in shea nut collection.
Shea nuts are derived from slow-growing trees indigenous to the West African region. Nigeria stands as a major player in global shea nut production, contributing approximately 500,000 tons annually, according to government data. Other prominent producers in the region, including Burkina Faso, Ghana, Mali, the Ivory Coast, and Togo, have already implemented similar export restrictions to promote their respective local processing industries.
The versatility of shea butter, extracted from the nuts, is well-recognised. It serves as a valuable substitute for cocoa butter and has received approval from US regulators for its inclusion in baked goods and moisturisers. Global leaders in plant-based oils, such as the Dutch company Bunge Loders Croklaan (a subsidiary of Bunge Ltd.) and AAK AB, are actively involved in shea butter production within West Africa. Bunge Loders Croklaan, for instance, has been operating a processing plant in Ghana since 2019, underscoring the region’s growing capacity for value addition.
Since assuming office in May 2023, President Tinubu’s administration has consistently pursued policies aimed at stimulating job creation by curbing the export of raw materials. The ban on shea nut shipments is a direct response to a significant imbalance: despite Nigeria producing nearly 40% of the world’s shea nut supply, the country captures less than 1% of the estimated $6.5 billion global market.
This policy intervention seeks to correct this disparity, ensuring that more of the value generated from shea nuts remains within Nigeria, fostering economic growth and empowering local industries.
The government’s move, while immediately impacting raw material prices, is anticipated to drive investment in local processing facilities, ultimately leading to a more robust and self-sufficient shea industry in Nigeria.
The long-term success of this initiative will depend on effective implementation and sustained support for local processors to absorb the increased supply and compete effectively in the global market for value-added shea products.
