Cashew is a multipurpose crop mainly grown for nut consumption, medicine, and as a means of income for cashew farm owners.
Cashew nut is one of the oldest and most popular export commodities in Nigeria. The business is a very lucrative one to start, as there’s always a strong demand for the goods both within and outside Nigeria.
With Nigeria being one of the largest cashew producer globally, the money to be made from the business is unlimited. However, you can’t just start blindly. There are lots of things to the business that you may not know, as the cashew nut business comes with lots of opportunities.
That is why we’ve curated this post to show you exactly how to start a cashew nut business in Nigeria. Not just that, but you’ll also discover different ways to get started, the cost of starting, how profitable the business is, and lots more.
So, if you’re ready to know all that, let’s get started then!
Starting a Cashew Nut Business in Nigeria
The cashew nut business involves the selling of cashew nuts within Nigeria, to exporters or exporting them by yourself. Cashew nuts are in high demand, as it is a good source of food and are also used for alcohol production, skincare products, biofuel, and so on.
The business is very easy to start in Nigeria, as cashew grows well in many parts of the country. The business is becoming popular day by day, and it can be approached in many ways.
Opportunities in Cashew Nut Business in Nigeria
There are lots of ways to start a cashew business in Nigeria, and they include:
The cashew farming business is one of the ways of approaching the cashew nut business in Nigeria. It involves getting farmland, planting cashew, and waiting for years before making money off your cashew farm by selling the nuts for consumption within the country, to exporters, or possibly exporting them by yourself.
Cashew Nut Sourcing
Cashew nut sourcing is the most popular way of approaching the cashew nut business in Nigeria. It involves finding cashew farmers, buying cashew nuts in huge quantities from them, and selling them to exporters. In other words, it involves sourcing cashew nuts for exporters.
Doing the business this way, you’ll need to visit rural areas where cashews are farmed the most to succeed. You also need reasonable capital to start sourcing cashew nuts for exporters.
Cashew Nut Exportation
The not-so-popular, but most profitable way of approaching the cashew nut business in Nigeria is to become an exporter. As an exporter, you can own your cashew farm where you source nuts, work with agents that source cashew nuts, or source the cashew from farmers by yourself, and export them abroad for sale.
This is the most lucrative way of operating this business, although it requires a huge startup capital. If you get everything right as an exporter, you could make millions of naira in profits per bulk export.
Cashew Nut Trading
Trading cashew nuts as a way of starting the business involves buying cashew nuts in bulk while they are cheap, storing, and reselling them when the price appreciates. Usually in Nigeria, there are some times when cashew nuts are very available and very scarce.
All you just need to do is to identify these two times and use them to your advantage, by buying low and selling high. As a trader, you can source cashew nuts to store from farmers especially, if you want to make the most profits.
How Profitable is Cashew Nut Business in Nigeria?
Usually, from people looking to venture into the business, one common question asked is – Is cashew nut business profitable In Nigeria?
Yes, the cashew nut business is very profitable in Nigeria. This is mainly because it is an export commodity, and as that, the money to be made would be in hard currencies which when converted into naira, would be a lot.
Also, the business is very profitable due to the daily increase in demand for cashew nuts both locally and internationally. One other thing that drives the probability of this business is seasonality.
In cashew harvest seasons, the price tends to be low, making just some profits. However, in off seasons, the scarcity of cashew nuts causes a massive increase in price. This time is when the most money could be made from the business.
How Much Does it Cost to Start a Cashew Nut Business in Nigeria
Just like the profitability of the business, people also usually ask – what is the capital required to start a cashew nut business in Nigeria?
Well, the answer is not certain, as the cost of starting a cashew nut business varies depending on the type of cashew business you want to start. Regardless, if you want to start a cashew business in Nigeria, a good budget would be anything from 700,000 Naira and above.
This means on a small scale or as a trader, you can start with 700,000 naira, while as a sourcing agent or an exporter, you would need millions of naira to start a cashew nut business in Nigeria.
How to Start a Cashew Nut Business in Nigeria
1. Decide on the Type of Cashew Business to Start
Since the cashew nut business offers numerous opportunities for entrepreneurs, the first step to getting started is to pick a type you want to start with. Here, you’ll need to carry out a simple survey across all types before settling for one.
Usually, it is best you go with the one that best suits your budget. With a small capital, it would be a great idea to go with the one that doesn’t require huge money to start (e.g farming, or trading cashew nuts). Also, make sure you go with the one that works well in your area. If you’re in a rural area, becoming a sourcing agent would be great.
2. Do Your Research
Based on the type of cashew nut business you wish to start, carry out market research to get to understand the business. By doing this, you’ll know the in and out of the business, how it works, how profitable it is, and so on.
Also, you need to find out about the registration required to run the business. To get the best result, it would be ideal to meet someone already in the business and ask those questions, and some others including:
- Where is cashew nut grown in Nigeria
- Current price of cashew nuts in Nigeria
- Cashew nut buyers in Europe
- Cashew nut buyers in Nigeria
- Cashew nut buyers in the U.S.A
3. Arrange for Capital
After understanding what the type of cashew nut business you want to start entails, the next thing is to source funds to get started.
While sourcing your capital, make sure you raise funds that will be able to account for every operation of the business from the purchase of goods, to the means of transportation, and equipment needed to run the business.
There are many ways to raise capital to start a cashew nut business in Nigeria. Since starting on a small scale doesn’t require much capital, you can source your capital from your personal savings. However while dealing with a large quantity of cashew nuts or starting as an exporter, if you don’t already have capital, you can seek partnerships or loans from friends and family to get started.
4. Register Your Business (Mainly for Exporters)
While no registration is required to start farming cashew and even buying and stocking the nuts, you must register your company with some legal organizations to start the cashew exportation business in Nigeria.
The necessary registrations include but are not limited to acquiring a CAC certificate. You’ll find out more about all the required registrations if you do your market research well.
5. Source Buyers
Unlike other businesses where you’ll need to have your goods at hand before finding buyers, with the cashew nut business in Nigeria, the first thing is to make sure that there are buyers before sourcing for the goods. Since the business is capital intensive, you don’t want to stock the goods for way too long, especially during the hike season before selling.
Sourcing buyers for your cashew nuts depends on the type you wish to start. Starting as an exporter, you’ll need to find international buyers to sell to. You can start with websites like Alibaba.com, or exporterindia.com to find buyers. Perhaps, you can look for international company representatives to work with.
As a cashew nut sourcing agent, you can visit cashew depots (they are available in many cashew-producing states in Nigeria), and source exporters to work with. While as a framer, you’ll always get sourcing agents and even exporters all across the country to work with.
In this step, also make sure you do some research about pricing, and go with buyers that fit your criteria.
6. Source Cashew Nuts
Sourcing cashew nuts is one of the easiest parts of starting a cashew nut business in Nigeria. Since Nigeria is one of the largest producers of cashew nuts, you can find sellers to work with in many parts of the country. Some of the states to find the best sellers include:
7. Get Started and Get Working
Once you find a good supplier to work with, the next thing is to get started. If you’re a sourcing agent, now, you’ll have to go to areas where cashews are grown to buy the nuts in bulk. As an exporter, your job now is to find a sourcing agent to work with, while as a farmer this is the time to start cultivating your cashew farm.
Also, if you’re looking to start a cashew nut trading business, you just need to identify the best time to buy and get started. With enough work, you should be able to make the business a success within a short period of time.
The cashew nut business in Nigeria is a very lucrative and easy-to-start business in Nigeria. Although it is capital intensive, anybody can start the business if you know how it works. With this post on how to start a cashew business in Nigeria, I believe you’ve understood the business, and how to get it off the ground.