How To Export Palm Oil From Nigeria: A Detailed Guide (2023)
Palm oil is very demanding in both local and international markets. It has resulted to a lot of business thriving in this industry. The demand for palm kernel oil and it products will continue to increase due to the fact that they are used for commercial, home and even industrial purposes.
With a lot of exportation of these produce going on, it has been a lucrative business with rewarding incomes. In this article, we will look at how to export palm oil from Nigeria to other countries that greatly needs this agricultural produce. From this piece of writing, you should be able to see the lucrativeness of this business in the export industry.
Looking at what palm oil and it by-products are used for, then it is pertinent to say that this kind of agricultural produce will still be demanding for a long time in the future. The various palm oil by-products is an essential raw material for the Cosmetics, Food, Animal Feed, Soap Manufacturing, Confectioneries, and Bio-diesel industries, among others. These companies specifically need these produce in the production of their products.
On the exportation of the products, the numerous processing industries as well as local dealers in the country are the first targeted customers. This includes the already mentioned cosmetics, food, animal feed, soap manufacturing, confectioneries, and bio-diesel industries, among others are target markets that need palm oil and it by-products. Those engaged in the palm oil exporting business (i.e. the distributors) can as well target the West African, African, European and American markets. On the other hand, the local distributors can as well help distribute the finished products. There are exporters already waiting to purchase the products in bulk.
Moreover, the oil palm is one of the many cash crops that Nigeria has in abundance. With this, there is a lot of business in it and a good number of Nigerians can really make a lot of money out of it. The business isn’t only restricted to selling it locally, but it can be more profitable especially by exporting it to other countries. This means you will have to buy more on large quantity; preferably, it is best to buy in the largest palm oil producing states so as to get the best on wholesale.
However, this agricultural produce, palm oil makes up nearly 50 percent of edible oils consumed in the world. Inasmuch as it’s a popular ingredient in Nigerian food (especially soups, stews and pottage), palm oil is also the most versatile of any plant product. The produce and it by-products can be used by a lot of industries in the production of products.
How To Start The Business Of Exporting Palm Oil From Nigeria
There’s no doubt that there isn’t a lot of business in the palm oil exporting sector. To give you a guide on how to venture into it, the following is a step by step process on how to start an exportation of palm oil from Nigeria;
Step 1: Knowing What’s Involved and Your Market
The business of exporting or trading palm oil from Nigeria to overseas is a great deal and not quite the same as selling them in the nearby market. Going by this, you can’t just start the business and be oblivious of what’s involved in it. There are some important variables that you should be aware of, which infer that you have to know the ropes of the business else your business will fizzle.
Preferably, a good way to accumulate the information you need in this business is by collecting data from somebody who has been and is effective in the palm oil business for quite a while. After getting in touch with such a person, you ought to ask from them how to run an effective palm oil exportation business in the country. Moreover, you should have inside and out information about exportation necessities and requirements, how to source your items, port method, how to discover customers, et al. to get the best out of this business.
Step 2: Sourcing the Palm Oil
Next, you should decide on which channel you will use for sourcing the palm oil. By this, it involves whether you will buy the already prepared palm oil or the products. On the off chance that you mean to purchase the former, then at that point you need to realize where to buy the palm oil at the least expensive cost in order to receive most extreme profit. It is ideal to search for a steady provider or potentially producer that will give you palm oil ceaselessly and in season. This will make you to go to the palm oil production areas and get the products.
Presently, Akwa-Ibom state has the most palm oil in the country. The state is situated on the coast in the south-eastern part of Nigeria. Uyo is the capital of the oil-rich state. Other notable states that produce palm oil in enormous amounts incorporate Cross River, Rivers, Abia, Imo, Ondo, Edo, Delta and Bayalsa states. These states are situated in the southern part of the country; which means that you ought to do your sourcing there.
Step 3: Registration of Your Business
This includes the documentation which are very essential to starting the business. These records incorporate, organization or business registration, quality confirmation and business archives, traffic concession, dispatching reports, et al. Since this is an international business, by first you should register the company you will use for the palm oil business.
Before you can send out products to different countries, you should enlist an organization. An individual hoping to trade palm oil could register as a sole owner, while medium/large organization can join as a Limited Liability Company. In Nigeria, the body that is in control for consolidation of organizations is the Corporate Affairs Commission.
Step 4: Documentation
In this kind of business, ensure you have quality documentation, because most of the foreign countries have exceptionally severe principles that you have to meet. As such you should ensure that your palm oil has a quality registration accreditation. The data of the business ought to incorporate location of handling organization, NAFDAC number, and date of creation.
Next on this is the shipping documents – the mode of transportation on this which is a foreign one, determines the type of documentation that will be required. The most cost effective method is shipping. You should get in touch with a good shipping company that has a lot of experience in commodity export. They will provide useful information and handle the documentation. Some documentation includes customs, trade organizations, purchasers and so forth.
Step 5: Marketing To Figure Out Your Buyers
Nowadays, with the modern technologies, it has been much simpler to execute business marketing. Indeed, even from your home, you can do a business transactions, and also close the arrangement. You can accomplish this by partaking in e-commerce sites and also utilize the online medias for marketing.
Nonetheless, it’s pertinent to always set your sights to countries that have an enormous interest for palm oil. This includes the top palm oil importing countries in the world like: India (9536K Tonnes), China (5909K Tonnes), Bangladesh (2816K Tonnes), Pakistan (2519K Tonnes), Netherlands (2483K Tonnes), Italy (1641K Tonnes), Germany (1338K Tonnes), and the rest of others.
Requirements for Registering Palm Oil Business in Nigeria
There are some significant prerequisites that you have to have set up before you can be allowed to register your palm oil business. They include the following;
- Your organization must have a minimum of two people, however close to 50 individuals.
- These people working with your company must be at any rate 18 years of age.
- If there are members of unsound mind, disqualified by CAMA or bankrupt in your team, then you won’t be allowed to register the company.
- The minimum share capital of your business has to be at least N10,000. You will also need to fill the documents listed below;
- A Notice of registered address of your business
- Articles of Association and Memorandum
- Receipt of payment of your stamp duties
- Particulars, list, and consent of the first Directors of your company
- Statement of compliance by legal practitioner.
That’s it on the registration! Since this is an international engagement, you should bear in mind that the process of getting your company registered may take some time to get processed. Normally, it can take as much as 3-6 weeks, depending on the schedule of the Corporate Affairs Commission. Also, the Nigerian Export Promotion Council will have to register your company. They give feasible data on best practices for exporters. Individual members additionally get access to foreign buyers and learn regulatory requirements for export.