Nigeria is one of the largest producers and exporters of cashew nuts in the world, exporting to more than 54 countries around the globe. Many cashew nuts dealers opt for the nuts from Nigeria because of the quality and many others are looking for information on how to buy cashew nuts in Nigeria.
In some of the African countries, buying cashew nuts by dealers can be very difficult and stressful as the government is responsible for the sale of cashew nuts. Countries such as Tanzania.
That is not the case in Nigeria, local companies have the freedom to buy and sell cashew nuts, cashew kernel, and other produce. This makes buying of cashew nuts and how to go about the trading easy compared to other countries for international buyers and dealers. In the last few years, there has been an increased count of buyers from countries like Vietnam, India, China, and many other countries.
Basic Information About Cashew Nuts
More than 19 states in Nigeria are producers of cashew nut with an average of 40 to 51 produce yield. This shows that the cashew nut production is averagely distributed among the states involved. Nevertheless, some areas have high-quality outturns of cashew nuts which can range from 47 to 53 at the start of the harvest period. One of the areas that produce the highest outturns in Nigeria is Ogbomosho in Oyo State.
Ogbomosho’s weather favors the thriving of cashew in its season, with this there is a very high probability of getting high-quality outturns.
Oyo State has many other areas that produce cashew nuts, but it is important to note that Ogbomosho has the highest harvest of cashew nuts over the years. This is not to belittle other areas of the states that produce good cashew to nut but to establish the frequency fact.
Aside from Oyo state, one of the high cashew nuts producing states that produce up to 50 outturns of the harvest is Kogi State.
Common Cashew Nuts Specifications In Nigeria
International buyers should look for cashew nuts that have high specifications before purchasing. Below is a list of the most commons specifications for raw cashew nuts that you can purchase in Nigeria;
- Outturn: Between 40 – 51 (The highest of the outturns are available at the start of the harvest in February)
- Nut Count: Between 170 – 205 per kilogram
- Moisture Content: 10% at the maximum
- Inspection: SGS
This is the most common specification of raw cashew nuts that you can find in Nigeria. The easiest outturn to get is between the ranges of 40 to 47 outturns. International buyers can explore the availability of massive outturns at the start of harvest (Around February) which ranges from 47 to 53 outturns.
About Cashew Kernels From Nigeria
As established earlier that Nigeria is a major producer of raw cashew nuts, but there are few cashew kernels processing facilities in the country which is a major factor in deciding the number of kernels available for export. The few available facilities in Nigeria sell the branded kernels to malls and supermarkets and most of the time, these facilities tend to export at high prices.
There are few ways to go about buying cashew kernels in Nigeria that will involve the local producers.
- One may need to find cashew nut processors in rural areas and make deals with them. They are very difficult to locate though.
- On the other hand, you can partner with a local company in Nigeria to set up a processing facility in Nigeria. With this, you can buy cashew nuts at the least possible price directly from farmers, process the nuts, and export them to international buyers.
Once a local cashew kernel processing facility is available in Nigeria, the reprocessing cost will be out of the total cost already and this will increase the profit margins for the international buyer. The reprocessing in Nigeria will not only make the kernels available but also ready to be exported at a higher profit margin to the real buyer in another country.
An additional way to making profits is processing kernels for local companies who export from Nigeria to other countries. With this, it is sure that the kernel facility will in use from time to time and generating profits too.
How To Safely Source for Your Cashew Produce
If you find the right export company, buying directly from them can make the purchase process easy and stress-free, when compared with doing the sourcing on your own. That said, there are few things to note when dealing with an export company in Nigeria or Africa. The specific requirements for Nigeria are listed below, but they mostly apply to other African countries:
The exporting company must be registered with the Corporate Affairs Commission (CAC) to make sure the company is registered and permitted to carry out business operations.
The export company must also be registered with the Nigerian Export Promotion Council (NEPC).
The company must possess a domiciliary account to accept international payments.
The company should get all necessary export-related documentation done before the shipment leaves the port of origin. Some of the documents are:
- Certificate of origin
- Bill of lading
- Inspection Certificate (SGS, Cotecna, Bureau Veritas, Intertek, etc)
- Phytosanitary certificate
- Fumigation certificate
Where To Find Reliable Exporters
An important question that still needs to be answered is how to find cashew nut exporters in Nigeria. You can use any of the methods listed below:
- Attend trade fairs
- Use search engines like Google, Yahoo, etc.
- Search for agents on Linkedln
- Sign up on trade platforms (e.g. Alibaba, Tradeford, Go4WorldBusiness)
Neogric offers a reliable global order fulfilment solution for cashew nut and other agric produce. Our end-to-end supply chain solution makes the export of quality Cashew nut easy, quick and safe. From the point of placing your order till it successfully gets delivered, we ensure you have nothing to worry about.
Price of Cashew Nut
The unit price of Cashew nut depends on a host of different factors including:
- The grade of the produce (usually the more the processing, the higher the price)
- The price of the raw material
- Age of the seeds (this can affect the price)
- The quantity ordered (the greater the quantity, the cheaper you can get it per ton)
- Harvest season (it is more costly when it is out of harvest season).
- Freight & haulage cost
- Percentage of markup
- Import duties
- Distance from the country of origin
- Technology/Infrastructure available in country of origin
- Relationship between the buyer and seller
How To Pay For Your Cashew Nut Produce
You can pay for your kola nut using different methods, but three of the popular ways of paying for your agric produce are:
- Bank (T/T) Payment
- Advance Payment
- Letter of Credit (LC)
Bank Payment (T/T)
Bank payment is also known as T/T, “Telegraphic Transfer” or “Telex Transfer” In other words, it is an international wire of funds from the buyer’s bank to the seller’s bank.
A T/T is technically not the same as a wire transfer, which is often done through the SWIFT network. However, when a seller or supplier asks for a T/T payment, a wire transfer is what they are really asking for.
The wire transfer based on the SWIFT system is the most common payment method in international trade. Typically, it takes 3-5 working days to clear, and generally costs between 25 and 50 USD, depending on your agreement with the commercial department in your bank.
There are sellers that will demand anywhere from 30% to 50% advance payment, and for good reason. If both parties have done deals in the past, sellers can ask for a percentage of the sales (about 30%) before they ship the produce and they can request for the remaining amount after a scanned copy of the Bill of Lading has been sent to the buyer.
It is the safest option for exporters and it also guarantees that they will have some funds to help with sourcing. It is popular among manufacturers on B2B marketplaces like Alibaba and also with commodity traders.
However, advance payment carries considerable risk for the importer (buyer) because the exporter (seller) might not be under as much pressure to ensure quality checks compared with a stricter form of payment. Some might even disappear entirely.
Having said that, advance payment is very useful and is widely used. For instance, the seller might need to secure the commodity in the face of increased competition. It can also be used when the exporter needs some money for sourcing the produce or for processing raw materials.
The most important thing is for both importer and exporter to build mutual trust by having a track record of successful deals with each other or other known companies.
Letter of Credit
Letter of Credit is an agreement generated by the bank of the buyer, guaranteeing payment once certain conditions are met. It is one of the safest types of payment available to both buyer and seller.
Some of the types of Letter of credit are:
- Commercial Letter of Credit,
- Sight Letter of Credit
- Transferrable or Non-Transferable Letter of Credit
- Standby Letter of Credit (SBLC)
- Usance or Deferred Payment Letter of Credit
- Revocable or Irrevocable Letter of Credit
- Confirmed or Unconfirmed Letter of Credit
- Revolving Letter of Credit
- Green Clause Letter of Credit
- Red Clause Letter of Credit
L/Cs are not totally safe (for either buyer or seller) too. For instance, sellers can ship substandard products or those that are different from the ones agreed upon. In this case, the seller gets paid and the buyer receives good he cannot use.
And speaking of the dangers of L/Cs for the exporter, the conditions in the Letter of credit might be practically impossible to fulfil; if an exporter agrees to such, he might be unable to receive payment. A report stated that of the letters of credit received in the UK, 50% are unworkable while 70% are rejected by the banks for payment.
Shipping & Delivery Terms
When shipping your products, it is important to take note of a few factors:
For smaller shipments, airfreight is often the preferred option but as the order volume increases, sea freight could become significantly cheaper. Usually when the order is close to a full container load (20 ft), sea freight is used. Despite all these, the Covid-19 pandemic has caused an increase in cost of delivery of products.
Cost of Delivery
When the order is of a large volume, sea freight often turns out cheaper than air freight. In fact, airfreight could be up to 6 times more costly than sea freight if the volume is large enough.
Time of Delivery
Sometimes, time will be more important to the buyer than the cost of delivering the produce. In this case, air freight will be the logical option (as stated above, the cost will be more). But if you have more time as a buyer, you should strongly consider using sea freight.
Incoterms refer to generally accepted shipping and payments terms. For example, buyers that have representatives in the source country or that can negotiate with the freight company can use the Free of Board (FOB) terms, since it gives them more control and can save them some money.
However, if the shipment is small or the buyer doesn’t have an extensive network to effectively handle payment for freight, insurance and port charges, he will be better off choosing the Cost-Insurance-Freight (CIF) payment option.
Import Cashew Nut The Right Way with Neogric
Neogric is a trusted global order fulfilment and sourcing solution company with deep expertise in the Cashew Nut industry. Our end-to-end supply chain solution makes the export of quality Cashew nut easy, quick and safe. Whichever region of the world you are, be it Europe, Asia, USA, Canada, Africa, South America or Oceania, you can reliably order your agric products and we will ensure it is successfully delivered to you.
Our Cashew Nut trade specifications are listed below:
- Origin: Nigeria
- Product Name: Cashew Nut
- Physical Specification: Based On Buyer’s Specification
- Quantity: Based On Buyer’s Specification
- MOQ: 10 Metric Tonnes
- Trade Process: Ex Works/FOB/CIF
- Inspection: SGS/Cotecna/Intertek/Bureau Veritas
- Packaging: Based On Buyer’s Specification
- Payment Method: TT (Bank Transfer) or L/C
- Shipping Time: 15 to 25 Days After Confirmation of TT or L/C
- Loading Port: Lagos, Nigeria or Tema, Ghana
Expected Shipping Documents
- Bill of Lading
- Certificate of Origin
- SGS Inspection Certificate
- Phytosanitary Certificate
- Fumigation Certificate
- Commercial Invoice
- Packing List
Place Your Cashew Nut Order
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