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SHEA BUTTER EXPORT IN NIGERIA; NON-OIL EXPORT OPPORTUNITY SERIES.
Presently Nigeria is the leading exporter of Shea nuts and butter in the world with a total trade value estimated at $400,000.
Shea butter is produced from the boiling and crushing of Shea nuts. Based on the level of refining done and contamination present, shea butter is now classified into five grades: A (raw or unrefined, extracted using water), B (refined), C (highly refined and extracted with solvents such as hexane), D (lowest uncontaminated grade), E (with contaminants). Commercial grades are A, B, C.
FACTS ABOUT SHEA NUT AND BUTTER
History: Shea nut butter has been used for centuries in Africa for cosmetics, funeral rites , medicinal ,soap making and as cooking oil.
Estimated National Production: 500,000 MT annually.
Export from Nigeria: About 3% of the national production is exported.
Types: Based on the oil content and level of processing.
Uses: They are used in the production of Shea butter which is used in the cosmetics, confectionary and other such industries.
Areas of Production: Shea nut is produced in Kwara State at Ode-Giwa in the Asa Local Government are and also in Minna area of Niger state in Nigeria. Other states include kogi, Oyo, Kebbi, Kogi and Ogun state.
The color of raw (grade A) butter ranges from cream (like whipped butter) to grayish yellow, and it has a nutty aroma which is removed in the other grades. Grade C is pure white. Grade A retains the most natural vitamins, especially vitamin A and vitamin E, which are partially lost in the other grades.
They are widely used as cooking oil and in the cosmetic industry.
With a production capacity of over 500,000 MT annually, Nigeria is the leading producer of Shea nut and butter in the world. However due to issues around quality, the nation is yet to full tap into the benefit of the expanding market for Shea nut and butter.
Based on quality and industrial application, Shea butter can be classified into the following namely Pharmaceutical, Cosmetics, Chocolate and confectionary.
In terms of market share, the Chocolate and Confectionary market represents about 95% while the Cosmetics and Pharmaceuticals market represent 5% of the market share.
Major European importing companies are primarily based in Denmark, Sweden and the UK. Denmark and the UK each imports well over 50,000 MT annually while Sweden imports are estimated at 25,000 MT annually. Fewer imports were recorded by France, as importers there are more interested in Shea butter as opposed to nuts.
The market is not open to much speculation and trades are done in a closed circuit dominated by the Europeans. Japan importers complain of being unable to break into the Europeans established network of clients and suppliers.
Shea butter is becoming increasing popular as an ingredient in cosmetics and soaps, especially in France and the US. Chocolate and confectionary products account for 95% of Shea butter demand, with only 5% currently used for cosmetics and pharmaceuticals.
The price of Shea nuts and butter follows the movement in the price of cocoa beans and butter but a sustainable lower price because it is only a substitute for cocoa butter in chocolate.
Based on the level of refining done and contamination present, shea butter is now classified into five grades: A (raw or unrefined, extracted using water), B (refined), C (highly refined and extracted with solvents such as hexane), D (lowest uncontaminated grade), E (with contaminants). Commercial grades are A, B, C.
The color of raw (grade A) butter ranges from cream (like whipped butter) to grayish yellow, and it has a nutty aroma which is removed in the other grades. Grade C is pure white. Grade A retains the most natural vitamins, especially vitamin A and vitamin E, which are partially lost in the other grades.
Based on the mode of application, Shea butter can be classified into pharmaceutical, chocolate/ confectionary and cosmetics grades.
The return on investment on the export of Shea butter it is between 10%-15%.
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SHEA BUTTER EXPORT IN NIGERIA; NON-OIL EXPORT OPPORTUNITY SERIES.
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Report Title: SHEA BUTTER EXPORT IN NIGERIA
Report Code: FORA/08/2011/034
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