Starting Ginger Export Business in Nigeria

Many people erroneously think ginger is only useful for domestic purposes but ginger has industrial value as well and used for the production of many things. Many of the industries in different countries demand ginger to be used for as a raw material in the production of their products. It is, in fact, one of the items Nigeria is blessed with that is ready for export. With over 160,000 metric tons being farmed each year, it’s no wonder that ginger plays a significant role in the agricultural sector of the Nigerian economy.

 There are many countries that demand ginger. Many countries such as the United Kingdom, The Netherlands, France, Spain, Germany, Italy, Poland and others in Europe demand for ginger in high quantity. Apart from all the industrial and domestic uses of ginger, it is highly demanded mostly during winter because of the effect on cold. Ginger is not only good for a cold weather, it is also good for a sore throat, common cold and general cold that is usually common during winter in Europe.

Nigeria is the third largest exporter of ginger in the world after China and India. In the Nigerian market ginger is well known and on high demand even though it is quite expensive. Most of the dried ginger that are available for international trade are simply sun dried over a few days, but artificial drying is also used in areas lacking a defined dry season to coincide with the harvest.

Ginger is produced in six states of the Federation namely, Kaduna, Nasarawa, Benue, Niger and Gombe with Kaduna as the major producer. Nigeria’s production in 2005 was estimated at one hundred and ten thousand (110,000) metric tonnes (FAO). In the market, ginger is available in various forms; fresh ginger rhizome, powder ginger and dry ginger rhizome. Out of this, ten percent (10%) is locally consumed as fresh ginger while ninety percent (90%) is dried primarily for the export markets.

Find International Buyers

You cannot successfully run a business without having buyers and in this case, international buyers. There are different ways to get buyers for your goods. Luckily, Nigerian ginger is actually a preferred type of ginger because of its flavor, spice, and oil. So the attraction of Nigerian ginger has already given you a head start.

One good way to get buyers is a good old internet. The internet is home to many things; the good, the bad and the ugly. For an exporter like yourself, you can use the internet to search for buyers of ginger abroad.

You can also get buyers by attending international trade fairs. NEPC organizes some that are a good meeting point for buyers and sellers.

Another way is to liaise with Nigerians living abroad. It is either they serve as your scout who will help you scout the market over there or they serve as your partner in the business.

Don’t forget to do a research around the market to determine the international price before setting your own price.

Other Logistics

Once you have secured your buyer(s), there are other logistics you have to take care of.

Packaging and storing your goods should be done with the ginger in mind. You have to store in a way that will not bring damage to your product.

Documentations like invoices, receipts, shipping documents, bill of lading, certificate of origin and other documents required by Nigeria and the country imported to should be cleared and settled.

You may have to travel or consider buying from any of the below states;  Kaduna, Gombe, Bauchi, Benue, Nassarawa,

You can reach the local farmers in these states by partnering with the local agents or sellers, who then ensures you get supply at even a profitable rate.

Packaging: Ginger should be packaged in jute sacks 35 – 60+kg for dried ginger, and 12.5 kg– 25kg for slices or powdered ginger.

You may accept payment through;

Cash in advance or wire transfer via bank account: This is an arrangement where your payment for goods is collected ahead of exportation, it’s done through bank wire transfer.

Credit sales/Letter of credit: In this arrangement, the buyer obtains credit from his bank, which authorizes that his bank should pay the supplier on his behalf, usually via the seller’s bank. The supplier gets paid once the buyer confirms receipt of goods in his home country, documents can then be released for onward clearing.

Document against payment/Draft documentary: Here the seller receives payment through the bank, the goods are usually shipped via bill of lading through his bank, the bank then forwards same to the buyer’s bank.

Ginger export can become either your full-time business or something that you do without ever leaving your home, by hiring people that will process all the trade operations themselves. In the first case, you’ll receive from 30% to 45% of pure profits, while in the latter scenario the margin can range from 20% to 30%.

Businessmen that only provide the funding, but don’t do any other work themselves and use consulting companies instead, can make from 10% to 20% profit of the export operation.

Regardless, you’re going to need to know all the stages of the export process after you’ve found a client:

1.       Contract negotiations.

2.       Putting together the necessary documentation.

3.       Transferring the sold ginger to a warehouse station.

4.       Product revision.

5.       Ginger relocation to the port.

6.       Shipment.

7.       Post-trade paperwork.

Note: The standard weight of a shipping package is 50 kg

Most Nigerian export operations are held with European and North American countries, with the most loyal importers being France, Great Britain, and Germany. Another benefit of ginger export is that you can conduct your trade all year long, with the most productive period lasting from November to March.

Unlike than the oil industry, Nigerian export services are still only beginning to develop and have a lot of room for growth. Thus, the agricultural market is always ripe with opportunities for new members, and if you’re willing to give it a shot, you’ll probably be rewarded for such a decision.

The price of ginger on the market is unstable and can vary significantly from month to month. The average range seems to be from $8,250 to $10,600 per meter ton. The price can change even more depending on the costs associated with packaging and the specific contract you’ve signed with your clients.

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