How to start cocoa exporting business in Nigeria and get international buyers online [Guide]

This guide would give you a broad overview on the cocoa exporting business in Nigeria, and get international buyers online.

Cocoa is an important cash crop in Nigeria. It is the highest non-oil export in the country.

The cocoa market is estimated to hit 24.25 billion USD in 2024.

Cocoa business is still considered under explored, and there’s enough room for more business people to make good money. While Africa dominates the world in cocoa production with over 70%, Africa is missing in the wealth in cocoa value addition, with just less than 5 percent market share.

As a country in desperate need to diversify its economy, this is one business you can venture into knowing the country need you eventually.

So are you ready to get started?

Let’s delve right in…

Introduction on cocoa

Cocoa, also called cacao tree, is an evergreen plant popularly cultivated to harvest its edible and rich cocoa seeds.

The cocoa seed is the major ingredient used in the production of chocolate liquor, chocolate solids, chocolate butter, and chocolate.

Cacao is a member of the family of malvaceae with its origin from the tropical rainforest area of central and southern America.

Cacao tree usually takes 3-5 years to grow it’s seeds. At maturation, cocoa pods are plucked off the tree and broken to extract the cocoa seeds. Each cocoa seed(also called cocoa beans) comprise of a seed coat, a kernel, and a germ.

Favourable Conditions for Cultivating Cocoa

In cultivating cocoa tree, you need the following conditions in your favour:

Temperature and weather conditions

Cacao trees are favorably grown in regions having about 27°C in average annual temperature, and an Annual rainfall of 150 to 350 cm.

Protection from Strong Winds

Strong winds often blow off unripe pods, and this can lead to waste and low yields for the farmers. Hence it is important to put measures in place to curtail such occurrence. As a typical example, Hurricanes can also cause huge damage to cocoa trees as seen in the West Indies and Central America.

Good covering from direct sunlight

It is encouraged as good practice to protect the cocoa tree from direct sunlight as it can cause pores on the cocoa pots. Planting of other crops to provide good covering from sunlight is a good practice.

Varieties of cocoa tree

The three main varieties of cocoa

Forastero

They are mainly known as the common cocoa as they are 95% of world production. The pods are short, yellow, smooth without warts, with shallow furrows. Their quality is not as good as Criollo. They are grown mainly in west Africa and Brazil. It is grown a lot in Africa.

 Criollo

Criollos are typically protruded, yellow or red in color, with deep furrows and big warts when they are ripe. They are mainly known as the fine or aromatic cocoa because of their very good cocoa quality, and are less than 1% of world production. They are  grown mainly in Latin America.

Trinitario

They are a hybrid of the Forastero and the Criollo and considered a fairly good, fine flavour cocoa. They are approximately 5% of world production, and grown mainly in Trinidad, Venezuela, Papua New Guinea, Sri Lanka, East Timor, Java and Madagascar.

Some interesting things to know about cocoa

  • Cocoa beans are rich in potassium, magnesium and iron.
  • Very rich in food value, cocoa beans contains up to 20% protein, 40% carbohydrate, and 40% fat.
  • Cocoa can prevent cancer and other heart , and blood related diseases as it contains theobromine, an alkaloid closely related to caffeine and phenols and flavenoids, antioxidants.

Cocoa in Nigeria

Agriculture was Nigeria’s main source of foreign exchange prior to independence. According to reports, 58.4% of the foreign exchange earnings from 1960 to 1970 was the export crop subsector of the agricultural sector.

Then came the discovery of oil in the 1970s which led to some drastic shift in the political and economic landscape of the country.

Oil became the main focus for foreign exchange, displacing agriculture, as evident in the sharp decline in output from 305,000, to 100,000MT, and Cocoa export contribution dropping to 5.3% from 1970-1985.

Although the 1986/87 cropping season saw output improved from previous lows to around 200,000MT due to Government intervention initiatives to revive the sector, the journey back to the top has been slow, maintaining an average of just 4% between 1980 and 2000. The country’s undying love story with oil has seen other sectors struggle over the years.

Nigeria is the third largest exporter of cocoa in Africa behind only Ghana and Cote’d’ivoire and the fifth in the world behind Cote’d’ivoire, Ghana, Indonesia, and Brazil, according to recent figures.

Tips

To run your farm here are some tips to help you:

  • Make good arrangements with farmers who’d be on ground to monitor your farm on a regular basis. You can look for good incentives for them. The best is if your farm is closer to a village settlement.
  • When getting your farm land, you want to look for areas you know wouldn’t be commercialized in the next 20-30 years.
  • Weed 3-4 times a year.
  • Always ensure carrying out best farming practices to achieve healthy yields.
  • Take some time in educating yourself on the best practices, and always look to transfer those knowledge to the farmers working with you.

Cocoa harvest seasons in Nigeria

Harvest season for cocoa span from October to September.

October to February as the prevalent period for harvest, while from April/May to September, harvesting of smaller and mild crops are common.

Where to find cocoa in Nigeria

Ondo State produces 70% of cocoa in Nigeria, making it the highest producer in the country. Here is a list of cocoa producers in the country, in no particular order:

  • Ondo
  • Osun
  • Oyo
  • Ekiti
  • Ogun
  • Edo
  • Delta
  • Akwa Ibom
  • Cross river
  • Kogi
  • Kwara
  • Abia
  • Anambra

Cocoa export supply chain in Nigeria

Every party involved in the supply chain play a key role in the overall business outlook of cocoa export in Nigeria.

These parties are:

  • Smallholder farmers
  • Middlemen
  • Exporters

The cocoa supply chain would typically start from local farmers; Small scale farmers are spread across the several cocoa producing states in Nigeria.

Each farm is about 2-5 hectares, and would produce on the average 0.6MT per hectare.

The farmers need steady and ready buyers to guarantee in-flow of cash to reinvest in their business, pay up immediate outstandings, loans and expenses.

Meanwhile the middlemen stand in the gap between the farmers and the exporters. They’re the aggregators. They source directly from the farmers and supply to the exporters in bulk.

Challenges facing Cocoa smallholder farmers in Nigeria.

These are the major challenges facing Nigerian cocoa farmers:

  • Lack of sufficient access to incentives and government support
  • Difficult access to market; poor road channels leading to high cost of transporting farm produce from farm to market
  • Increasing running cost of production
  • Less favourable climatic conditions; Climatic conditions now are far less favourable to that in the 70s and 80s.
  • Seasonality of cocoa farming means farmers do not make money during off seasons, and these periods can be challenging times for the farmers.

Challenges facing Cocoa exportation business in Nigeria.

  • Volatility and unpredictability of foreign exchange.
  • Dwindling number of smallholder farmers due to uninterested budding  youth, and interest in other endeavours they feel is much more profitable.
  • High interest rates, to get financial credits and loans
  • Unstable political will.
  • Difficult port and customs regulations
  • Governing bodies who are key players in the value chain have over the years failed in providing adaptation and workable systems and policies to ensure ease of doing export business.

Top cocoa exporting countries in Africa

  • Cote’d’ivoire
  • Ghana
  • Nigeria
  • Cameroun

Top importers of cocoa in the world

  • Netherlands
  • USA
  • Germany
  • Malaysia
  • Belgium
  • Indonesia
  • France
  • United Kingdom
  • Italy
  • Turkey
  • Spain
  • Canada
  • Singapore

Top cocoa importers in Europe

  • Netherlands
  • Germany
  • Malaysia
  • Belgium
  • France
  • United Kingdom
  • Italy
  • Turkey
  • Spain

Governing organizations to follow as a cocoa exporter in Nigeria

  • The Nigerian Cocoa Association
  • World Cocoa Producers’ Organization
  • Cocoa Research Institute of Nigeria (CRIN)
  • Cocoa Framers Association of Nigeria
  • OWIT Nigeria

Opportunities in Cocoa Export Business

  • Surging global demand cocoa and cocoa futures, In 2011, the trading volume of cocoa futures on the Intercontinental Exchange (ICE) was 4.95 million tons, exceeding production by 750,000 tons.
  • In November 2011, global sales of chocolate confectionery crossed US$100 billion for the first time, with consumer demand for chocolate anticipated to continue increasing and possibly outstripping supply.
  • Cocoa processing market is estimated at $200 billion.

Getting started with cocoa export business

Next we’ll look at the three steps to take to get started as a cocoa exporter

  1. Set up your business plan
  2. Promote your business
  3. Fulfilling your orders.

Setup your business plan

A key component in planning your business is knowing your strengths and weaknesses.

You should look at what you’re capable of as against what you’re incapable in terms of capital, resources, reach etc. This would give you an idea on how to go about structuring your plan to meet your business goals.

In your business plan questions you want clear answers to are:

  • How do I get customers?
  • How am I going to maintain  supply to my customers?
  • Am I owning my own farm or leasing or partnering smallholder farmers?
  • Who are my key partners to help me achieve my supplies and fulfill my orders?
  • Which technology can I leverage to achieve my goals?
  • How am I advertising my product? What methods would I be employing? If we’re talking about online advertising, should it be Paid ads vs free ads, or combination of both?

Bottom line? To stay profitable, what strategy would best work for you based on what you have vs what you don’t have?

Remember, you’re dealing with international buyers, they’d be most likely be sophisticated and your business has to be well planned and presented, backed with the right principles of course.

If everything is well planned, you can achieve success even without spending too much capital. Also remember, cocoa business is evergreen, one cocoa tree can last for 30 years, producing constantly once it’s matured. So the initial cost might feel or look too much, it gets better over time with good rewards to follow.

Now that your well-thought-through business plan is ready, the next step is to

Register your business with appropriate governing bodies.

Register your business 

Exportation business is a serious endeavor. A lot of risks are involved, so anything to help reduce the risk from the side of your buyers should be encouraged to win them over.

That’s why it is necessary to register your business with all necessary bodies.

Registering with these organizations is necessary. Some of them would give you necessary support like low interest loans, trade information and support to help your business grow.

The good part of this is most of these bodies are online, so you can start from there.

Start your business registration online by clicking on the following links:

CAC (Corporate Affairs Commission) – Start the registration of your business online. Give your business credibility and visibility by registering your business as a legitimate business in Nigeria because international buyers would mostly do business with verified businesses. Start here: https://pre.cac.gov.ng/register/new

Nigerian Export Promotion Council (NEPC)

The NEPC rules over all other apex institutions involved in the promotion, development, and diversification of exports in Nigeria.

Their activities involve:

  • Co-ordinating and facilitating export development in the country
  • Facilitating export promotion activities
  • Working with international trade agencies on cooperation and capacity building.

You can visit their official website here: https://nepc.gov.ng/ereg/exporter.

Or go straight to register your business with them here: https://nepc.gov.ng/get-started/e-registration/

Organization of Women in International Trade (OWIT) Nigeria

Awesome for woman into international trade, you can join them and benefit a lot from partnering with international and local businesses, to getting low cost loans, and other wonderful benefits. You can read more on them and become a member here: https://owitnigeria.org/join-us/

Cost Analysis

Before we move ahead, let’s try to do a rough sketch of what it’d cost you to setup your cocoa export business.

Startup Expenses

Land(1 hectare) – N4M

Warehouse & drying facility- N2M

Laptop/desktop computer- N200,000

Cocoa seedlings – N210,000

Farm clearing and preparation- N30,000

Planting and workmanship- N100,000

Website building – N100,000

Promotion cost – N200,000

Registrations – N50,000

Packaging – N500,000

Transportation – N3M

Documentation- 50,000

Total = N9.34M

Monthly running cost estimation

Internet subscription – N10,000

Webpage maintenance – N30,000

Promotion costs – N200,000

Salaries –N250,000

Calls and communications-N5000

Office space- N10,000

Miscellaneous – N10,000

Total: N515,000

Other costs to consider is for custom brokerage and freight forwarding. Their costs arent fixed as it depends on several factors. But ensure to include them as variable costs.

What’s next?

If you’ve already set the ground running; you have your farm, business plan, registrations, and everything we’ve talked about so far up until now, I’m sure all you want is to be bombarded with calls from buyers, placing orders, and business booming.

Promote your cocoa business Online

How do you get international  buyers for your cocoa beans?

There are several ways. But we just cut to the chase and focus on our preferred way- the internet.

The internet is your fastest and most cost effective way to reach foreign buyers. It presents a mouth-watering prospect such that if gotten right, you can build an awesome, and well fulfilling business for yourself. 

Some Facts about the internet

  • More than 60% of the world’s population use the internet, that amounts to about 4.72billion people around the world [datareportal].
  • According to Netcraft, there are over 1 billion active sites on the web today and it’s number keeps changing every second.[Netcraft]
  • According to MOZ, Everyday, 77 percent of people use google at least three times to search for things online.
  • 54 percent of social users research products using social media [globalwebindex].

You can get your buyers online because people are using the internet to search for things to buy. The internet is one huge community, get plugged in.

What’s so beautiful is you don’t need to be a software guru to own and manage a website. You can outsource it.

Outsourcing is a fantastic way to leverage other people’s skills especially on something you’re not so good at, while you focus on other things.

To get buyers on the internet, you’d need an online presence. Your online presence just asks the question how easy and often are you found online? So to get started, here’s what you must do:

  1. Build a website/online store
  2. Manage the website
  3. Promote your website

What you need to build and run a website

  • Domain name
  • Hosting
  • Design
  • Maintenance

Website vs online store

Think of your website like a well prepared business card, only that it has much more details in it, and your online store is a brochure that contains your products and price listing.

If for you, the internet is a vital avenue to getting buyers then you might be doing yourself a disservice by choosing to use one over the other.

It’s all about online presence. Let your business be out there as possible, given it’s within your budget.

WebsiteOnline Store
You own the websiteYou’re renting a website within another person’s/company’s website
It can take lots of time and effort for buyers to see your products on google search.It takes little time to get customers to see your products on google search as your store is within a bigger website that’s well ranked on google search engine.
It would cost you lots of time and effort to build your brandIt can help you build your brand faster online
If done expertly, you might spend little and get free buyers and customersIt can be capital intensive, however if done properly, is worth every penny spent.
Table to compare having a stand-alone website vs running online marketplace store

In promoting your website and business online, there are two methods:

Organic method

You can get buyers without having to spend any money, this method can take time but is really worth the while if done properly. The best approach to this is giving something of value, and getting traffic as reward. You’d be focusing on ranking for relevant keywords that lead people to clicking your link to your website or web store. You then sell your products to the visitors of your website.

But it’s not so easy, because there are billions of websites out there competing for your prospects’ attention, hence the need to tilt the odds in your favour by ranking at least on the first page of searches relevant to your business.

Remember, the aim is to make the first page of google search.

Why?

According to this survey conducted by MOZ, 75 percent respondents preferred to click one of the top two results. They’d prefer to scan through the first search page to find relevant answers to their queries, or link to other results from page one.

Another interesting findings from the survey was respondents largely preferred to click on organic search results than click on advertisement.

Paid method

This is another route to making first page on relevant keywords on search engines. Advertisers bid on keywords and they pay per click once browsers get to your website through your link from the search page.

This requires you to have a good budget, and expertise to get good results. Results can be instant if done expertly.

you can advertise on:

Search engines

Search engines like Google, and Yahoo have Google ads, and Yahoo ads.  Advertisers bid for keywords, they pay per click once there’s a click on your link to your website or online store.

Other people’s website

You, or advertisers like Google and Yahoo can pay owners of particular websites to advertise on their platform. Owners of websites are then paid each time there’s a view on your ads displayed on that website. This is called pay per impression or pay per view.

Social media

Social media helps you connect with people on a personal level. You can really make a good impression of your business by having a good social media presence that connects with the people.

Take clean pictures, engage in quality conversations on relevant topics, showcase your expertise as a thought leader in your business.

Be creative.

Facts about social media

There’s been a staggering number of social media users in the world. Reports show there are over 3.5 billion active users.[emarsys, 2019]

Statistics show that one person spends 3 hours on average on social media everyday.

[globalwebindex]

Your task is to maintain steady flow of buyers while also building a brand people can trust through good farming practices and quality online presence.

Tips

  • Make sure you understand the nitty-gritty of running an online ads campaign, if you don’t, hire someone or outsource professionals to run for you.
  • In the case of advertising with a particular website, make sure you do your findings on the website to ensure their kind of visitors are the kind who can buy your product.
  • Your website should contain the following:
    • Company name
    • Vision and mission statements and a little bit about you. Eg when it was founded, your partners, your present customers, etc.
    • Description of your business values
    • Your products and production capacity
    • Production description
    • Email and contact information

Order fulfillment and getting paid

To export your goods, most exporters make use of freight forwarders, and custom brokers as they make lives easy for them. These are specialists in moving goods to different places in the world, and also handling of custom related issues.

Tips

  • Ensure your cocoa is exported in well ventilated cool, and dry conditions to ensure the beans can arrive at buyer’s destination without blemish.
  • Never agree on any agreements until you’ve agreed on payment method
  • Depending on your negotiation skills, your buyer can bear part of the shipping cost. Of course this would only work if there’s the element of trust in the equation.
  • If the relationship is not strong enough, buyers would most likely prefer a POD (payment on delivery) arrangement. If that be the case, it’s not a bad idea to request the buyer make down payment to show they’re serious about doing business with you.
  • In finding a freight forwarder, you should look out for those with good experience in shipping cocoa to your buyer’s location.
  • In your agreement with your buyer, ensure pricing is factored in. In Nigeria, the futures commodity exchange is still a concept the government is looking to support exportation in the country. Futures contracts can help buyers and sellers mitigate risk that occurs due to currency fluctuation. So you can agree with your buyer to peg your commodity price based on current global price such that if it changes in the future, you don’t incur loss.
  • Know your rights as an exporter to any country. It’s possible some of these foreign buyers can take you for a ride if you don’t know what’s within your rights as an exporter to their country, issues like what happens if your buyer decides to cancel their order last minute? Surely you shouldn’t bear the loss for that.

 You can visit the NEPC guide to get more information on logistics and freight https://nepc.gov.ng/get-started/logistics-freights/

Now that we’ve come to the end of this guide, we know not everything on this post can be assimilate once, so you can bookmark this and come back to it in the future. Feel free to drop your questions and comments on this topic.

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How to Export to US, UK, EU, ASIA with good documentation

The demand from European, US, Asian markets for African commodities has been on the increase.

Export business from sub-Sahara is very lucrative and this is why it is quite compelling to consider exporting from Kenya, Nigeria, Ghana, South Africa and other African countries based on having the requisite knowledge and current economic parameters.

Some of the benefit of export business are as follows but this is not exhaustive:

1. Increased sales and profit
2. Create potential for business expansion
3. Gain global market shares
4. Increase life cycle of products
5. Take advantage of economies of scale
6. Diversifying income
7. Gain new knowledge and experience
8. Earn more in foreign currency

Based on the above itemized benefits of export business, this article will be addressing exporting from Nigeria, you will get started by first registering with the national export body. For Nigeria, (Nigeria Export Promotion Council – www.nepc.gov.ng ) as an exporter via e-registration platform as you will need the exporter’s certificate.

The needed documents for limited liability company registration are as follows:

1. Certificate of incorporation, CAC 1.1, Form C 07, and copy of memorandum and article of association.

2. Registration charges: https://nepc.gov.ng/get-started/e-registration/

Once the export certificate has been completed, carry out research in the following areas in order to minimize your risk and increase gain; Trade statistics, trade policy, regulatory framework, channels of distribution, logistics and risk assessment.

Going further for an export business, your company can begin processing the Nigeria Export Proceed (NXP) through an authorized bank.

You will be required to open an export domiciliary account with any bank in Nigeria in which you registered the form NXP. This is a control that ensures that export proceeds are repatriated and credited to your domiciliary account within 180 days from the Bill of Lading date. Payment method could be direct advance transfer, Letter of Credit (LC), Bills for Collection, and other approved international mode of payment acceptable for exports from Nigeria. Cokodeal introduced its escrow services to help receive funds from countries around the world and credit your account locally.

With the completion of NXP, a Request for Information (RFI) shall be collected from the Pre-shipment inspection agent. This is to enable the inspection agent to coordinate the date and time for the inspection.

Please, note that the following are exempted from inspection:

SCHEDULE “A” EXPORT GOODS EXEMPT FROM INSPECTION

  1. Personal effects
  2. Used motor vehicles
  3. Perishable day old chicks
  4. Vaccines, Yeast
  5. Objects of Art
  6. Explosives
  7. Pyrotechnic products and arms
  8. Ammunitions
  9. Weapons
  10. Live animals

SCHEDULE”B” PROHIBITED EXPORT

  1. Raw hides and skin
  2. Scrap metals
  3. Timber – Rough and saw
  4. Unprocessed rubber latex and rubber lump

Please avoid trading prohibited goods as it may lead to unimaginable adverse consequences and loses to your export business.

Once the product has been inspected by the Pre-shipment inspection agent along the side with all relevant goverment agencies and all parties are satisfied, a clean certifcate of inspection CCI will be issued.

With issuance of CCL, the product for export is now ready to be loaded on board the vessel based on the agreed Incoterms which defines all obligations of buyer and seller within the logistics and supply chain

Export business in Nigeria will require the following documentations:

  1. Bill of lading (BL) / Air way bill (AWB)
  2. Packing list
  3. Certificate of Origin
  4. Commercial invoice
  5. Single goods declaration (SDG)
  6. Nigeria Export Proceed (NXP)
  7. Clean certificate of inspection (CCi)
  8. Certificate of weight and quality
  9. Road transport waybill

In addition, export business will require other documentations depending on the regulatory body that is involved. This will include the following:

Phytosanitary certifications for agricultureal commodities (NAQs)

Health certificate for processesd and semi-processed food items (NAFDAC)

Internatinoal veterinary certiciate and animal products (DVPCS)

Fumigation certificate for agricultureal commodities (FPIS)

Lastly, In an export contract draft, for a legal biding transaction here are some of the terms used;

Terms of trade (Incoterms)

Mode of payment

Mode of delivery

Trade enforcement organs

Agreed dispute resolutions mechanism

Presiding court

At The Commodity Bank ( cokodeal.com ) over the last decade many of our exporters do experience different challenges along the value chain.

At any point you have any question please get in touch with cokodeal support center for professional advise, it is free

Email: service@cokodeal.com

Whatsapp: +234 816 3229 560

credits to: ronish logistics

For new members ready to explore export business start by registring with link below

https://cokodeal.com/register

Wishing you success in your international trade business.

8 ways to find buyers in Europe and US market for export deals

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Finding buyers and contracting sales is a key priority of any company. These aspects provide proof that your intensive preparations and investments are being received well. Below, you will find eight tips to help you find buyers in an organised way.

How to find buyers for export goods in Europe

  1. Start by conducting thorough market research
  2. Decide on which countries you want to focus
  3. Study market requirements and prepare yourself well before starting to sell
  4. Review the websites of European sector associations
  5. Participate in trade fairs and conferences
  6. Network and meet buyers face-to-face
  7. Use direct marketing
  8. Make sure that you can be found online

 

1 . Start by conducting thorough market research

In B2B trade (Business to Business), the number of buyers is more limited than in B2C trade (Business to Consumers). Still, there are several hundred importers of spices and herbs in Europe who are your potential buyers.

Before you start searching, think about the type of buyer for which you are looking:

  • importers of raw materials;
  • packers;
  • distributors of pre-packed products.

Each of these buyers has different demands in processing, packaging, order size, supply time and service level.

In addition, do you focus on a specific niche such as organic, Fairtrade or sustainable, or do you offer conventional products? Your challenge will be to find a buyer that not only needs your products but also matches your capabilities.

Opportunities on the market for spices and herbs can be found in both the lower end and the higher end of the market.

At the higher end, organic, Fairtrade, sustainable and speciality products are in demand. Food safety requirements are also stricter at the higher end of the market and traceability is required.

At the lower end, spices without such differentiating characteristics can be traded, but this segment tends to become smaller over time.

In Europe, certain countries serve as trading hubs for herbs and spices; for example, Spain for chillies or the Netherlands and the United Kingdom for pepper. Find out which countries serve as a hub for your product(s). Then, focus your search for buyers on these countries.

Importers often serve multiple European countries and sometimes even the whole of Europe. This fact makes them a good starting point for first-time exporters.

Tips:

  • Read our study of the Market channels and segments on the European market for spices and herbs for information about the different kinds of buyers.
  • Identify to whom you want to sell: importers, packers or processors, distributors of pre-packed products or directly to the retailers.
  • Find out which countries offer opportunities in our study of Trends for spices and herbs in Europe.
  • Find buyers that match your capabilities in terms of size, organisational structure, product (e.g. mainstream or niche), and compliance with food safety and sustainability requirements.

2 . Decide on which countries you want to focus

If you are selling spices and herbs in bulk, your potential clients will be importers and packers specialised in this industry. Especially the importers will serve several European countries or even the whole of Europe. In this case, find out which countries serve as trading hubs for your products. This area is where your initial focus should be. Packers may work at the European scale or nationally. In either case, you may select two or three priority countries. Focus your research on these countries.

Tips:

  • See our product fact sheets on spices and herbs, which focus on Europe as a whole but highlight the most interesting markets within Europe as well. Have a look, for example, at our fact sheets on the European market for dried ginger, the European market for sustainable spices and herbs and the European market for culinary dried herbs.
  • Have a look at the studies of Trends and markets for spices and herbs, which focus on Europe as a whole but provide some details on the countries as well.

3 . Study market requirements and prepare yourself well before starting to sell

B2B trading is a small and close-knit world, and you have only one opportunity to make a first impression. Make sure that you are well prepared before you address the market.

Buyers are receiving dozens of emails with product offers every week and will only seriously consider your offer if it looks professional. Do not try to lure buyers with unrealistic or low prices. They know what good quality should cost, so focus more on quality, food safety guarantees and supply capability in your communication.

Certifications for HACCP and GMP are an important plus or, more often, a must in the eyes of buyers; so try to know in advance what the buyer requires from a first contact.

Tips:

  • You may have to upgrade your processing facilities and sourcing strategies to meet European requirements.
  • If you do not meet the strict quality requirements imposed on northern and western European markets, try to look for buyers in eastern or even some southern European countries. The same legal requirements apply, but they will often accept lower-quality spices and herbs (lower oil percentage, dull colour or slightly damaged) or they may not always ask for additional guarantees such as food safety management systems.

4 . Review the websites of European sector associations

Sector associations are a good place to find potential buyers. Some of the associations publish member lists on their website, where you will be able to find contact details for many European companies. Alternatively, it is often possible to request these lists by email.

The most important sector association in Europe is the European Spice Association (ESA).

Most European countries have their own national associations for the spices and herbs trade as well, such as:

Tip:

5 . Participate in trade fairs and conferences

Trade fairs are a great place to meet potential buyers. You will find that many trade fairs include a section dedicated to spices and herbs. There is no international event solely focused on the spice and herb sector yet.

Many countries exhibit in these trade fairs with a national pavilion. If your country is one of them, you may be able to exhibit in this pavilion at a reduced cost. Alternatively, you can book an individual stand directly with the organisers.

For the first time at an event, it is a good idea to participate as a visitor instead of as an exhibitor. This approach is a good way of getting to know your target market.

The most important international trade fairs are:

  • Anuga, the largest trade fair for food and beverages in Europe. It is held every other year in Cologne, Germany and hosts relevant sections for spice exporters: Fine Food, Bread and Bakery, and Organic Food;
  • Salon International de Alimentation (SIAL), held every other year in Paris, France. It is a general trade fair for food and beverages, with a strong focus on France. It has more diverse sections including relevant sections for spices and herbs: Pavilions of the World, Infood and Organic Food;
  • Food Ingredients Europe (FIE), a smaller trade fair focusing exclusively on ingredients, including raw materials and semi-finished products offered for sale to the food industry. The trade fair is held at different locations in Europe every year.
  • Natural Ingredients Europe (NIE) is a trade fair organised by the same organisers as FIE and is held every year, either together with FIE in odd years or with the other trade fair Health Ingredients Europe (HIE) in even years.
  • Biofach, a trade fair focused exclusively on certified organic products. It is surprisingly large for such a specific niche and held in Nuremberg, Germany every year in February. Spice exporters can be accommodated in the sections with international pavilions. Biofach also includes an annual conference on developments in the global organic industry.

Tips:

  • Trade fairs often publish lists of exhibitors. These lists are a good source of contact details for potential buyers. See, for example, the option to search for exhibitors on the Anuga website.
  • Prepare well before visiting or exhibiting at a trade fair. Make appointments in advance, use email and other media to inform people that you are coming, and prepare samples, brochures, business cards, websites and price lists.
  • Some trade fair organisers host local or national events to which international buyers are also invited. In Asia, for example, FIE organised trade fairs in Vietnam, Indonesia and Thailand over the past few years, and it will continue to do so in the coming years. See the Fi Asia website for more information. In Peru, the Expoalimentaria has become a major commercial event (held in Lima annually in September).

6 . Network and meet buyers face-to-face

On top of international trade fairs and conferences, you will find smaller events being organised by sector associations. One example is the annual conference of the European Spice Association (ESA). This event is for members only, but it is a great opportunity to meet buyers.

This conference is not a trade fair, though, and it is probably most suitable for more experienced exporters. The trading community present here may have little time for meeting small start-up companies.

It is also a good opportunity for finding out the latest developments in the industry.

Other examples of this kind of event are the World Spice Congress, the meetings and exhibits organised by the American Spice Trade Association (ASTA), trade missions and smaller B2B meetings. However, the primary purpose of these events is to resolve certain issues in the sector. As a result, trading is not the main purpose of such events.

Tips:

  • National governments may organise trade missions or B2B meetings. Contact the trade departments of European embassies in your country or the trade departments of your country’s embassies in Europe.
  • Contact national and international spice associations such as the International Pepper Community (IPC), Vietnam Pepper Association and Spice Board India to find out whether any events are being planned.

7 . Use direct marketing

Think about the best way to communicate with your potential buyers.

One cost-effective way is direct marketing via a promotional email. Email is a powerful tool to come into contact with potential buyers. You could write a short and professional email introducing your company and product offering.

In the email, include a link to your website. The link should be up to date, in English and consistent with your product offering. Even if you do not get a response, follow up the email with a phone or Skype call. This approach will increase the chances of success.

Tips:

  • Be honest. Do not try to attract buyers with unrealistic or low prices. They know what good quality costs, so focus more on quality, food safety and your strongest capabilities.
  • Send a presentation that introduces your company, your products, and your strengths and skills. This strategy is a good starting point, which can be followed by additional information such as quotations, packaging options or delivery terms.
  • Do not send mass mailings. This practice is considered as spam (unsolicited commercial email) in Europe and is an unwelcome form of communication.

8 . Make sure that you can be found online

Apart from actively searching for buyers yourself, it is also important that buyers can find you.

You need to have a website that contains basic information about your products, your facilities and relevant documentation, for example.

Make sure that your website is informative, accurate, well written and professional.

On your website, pay attention to the issue of sustainability, since this issue is receiving more and more attention in the spices sector.

Social media such as LinkedIn and Facebook are increasingly popular as a way to promote products and ideas. Adapt your style to your audience, but make sure that your message and the information which you distribute is consistent across all your chosen online and offline media.

Tips:

  • It is a good idea to ask for or employ assistance from someone who can write well in English and understands your target audience. A professional editor is one choice. They will be able to help you find the right style, and remove or avoid spelling mistakes and grammatical errors. This aspect adds to your professional image; mistakes do not.
  • It is also a good idea to post your product offerings on online trading platforms, yellow pages or databases such as Alibaba and Cokodeal. These sources are widely used by buyers and sellers. Often, buyers are not looking for a service but for contact details.
  • Organic Bio is an interesting platform to find buyers if you offer organic edible preparations and spices.

 

To register as a supplier — follow this link —

http://www.cokodeal.com/index.php?option=registration&task=sellerregister

Article credit: – cbi.eu

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Whatsapp +2348163229560

Exporting dried ginger to Europe, requirements and buyers

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Europe is an interesting market for exporters of dried ginger. The demand is expected to grow in the coming years and prices are rising or relatively stable. China is the main supplier of both whole and ground ginger to Europe, and it is your main competitor on the European market.

 

1 . Product description

 

Ginger is the irregularly shaped root (rhizome) of the ginger plant (Zingiber officinale). The plant is cultivated in the tropics. The main producing countries are China, India, Nigeria and Peru.

Ginger is mainly used in:

  • oriental and Indian cooking;
  • bakery and confectionery products;
  • liqueurs.

The markets for fresh and dried ginger are closely connected, however, fresh ginger exports are even larger than dried.

Drying of fresh ginger generally takes place in the countries of origin.

Within the Combined Nomenclature (CN) classification, dried ginger is covered under the following codes.

  • 0910.1100: ginger, neither crushed nor ground
  • 0910.1200: ginger, crushed or ground

 

 

2 . What makes Europe an interesting market for dried ginger?

Growing imports of dried ginger in Europe

The worldwide consumption of ginger is increasing. The global and European market for ginger is expected to show significant growth until at least 2020. Consumers buy ginger during the winter because of its health properties. For example, consumers use ginger as a sore throat remedy. The growing ginger market in Europe provides opportunities for you as an exporter. Buyers are increasingly willing to invest in long-term relationships or collaborations with their suppliers to ensure sufficient supplies.

In 2017, the total European imports of dried ginger reached 160 thousand tonnes. Since 2013, the import volume has increased by 12% annually. The import value increased in that same period by 13% annually, reaching €250 million in 2017.

In 2017, more than 70% of the total European imports were sourced directly from developing countries. Please note that Figure 1 below excludes countries other than European or developing countries. In 2017, these other countries accounted for only 0.12% of the total European imports.

Since ginger cannot be produced in Europe, the European supplies illustrated in Figure 1 are based on re-exports. European re-exports accounted for 29% of the total imports in 2017.

 

 

The Netherlands, the United Kingdom and Germany are the most interesting markets for dried ginger in Europe

In addition, consumption includes the use of ginger in the food processing industry. This fact is important, since a large share of ginger is used in this industry; namely for bakery products (such as gingerbread and cookies), Asian food products and various drinks (e.g. ginger ale or ginger beer).

 

Interesting markets for you as an exporter include the following:

  • The Netherlands is the largest importer and trader of ginger in Europe. Its imports have increased significantly in volume by 13% annually between 2013 and 2017. In 2017, 97% of Netherlands imports were sourced directly in developing countries. The country has a high and relatively unstable per capita consumption. Since 2014, consumption increased significantly. This instability and sharp increase could be caused by the country’s important role as a trade hub for intra-European trade, since consumption is calculated as imports minus exports. While consumption is not expected to be that instable, imports and re-exports of ginger varied significantly during the last years, due to stockpiling. The volume of stock is not accounted for in these figures.

 

  • Since the United Kingdom sources 93% of its ginger from developing countries, it is an interesting export market for your products. The country is also the second largest importer of ginger in Europe, which could be caused by the relatively substantial population of Asian descent. Its consumption per capita is significantly higher than the European average and has been increasing slightly since 2014.

 

  • Germany is the third largest importer of ginger. Its total imports in volume increased by 14% annually since 2013. The German per capita consumption is slightly higher than the European average.

 

  • France is a large importer of ginger and its imports have increased in volume by 13% annually since 2013. In 2017, the imported volume in France reached 6,400 tonnes.

 

  • Italy is an important trade hub for ginger. Since 2013, imports of ginger in Italy have increased significantly by an annual rate of 39%.

 

  • Spain is a fastgrowing market for ginger. Imports into the country increased by 29% between 2013 and 2017.

 

  • Many other smaller importers are increasingly importing ginger directly from developing countries over the last five years. Examples are Portugal (growing by 33% of imports annually), Austria (25%), Sweden (20%), and Poland (17%).

 

 

Local value addition is becoming more important

European exporters or re-exporters add value to dried ginger by further processing and packaging. However, the processing of ginger is also done in the country of origin. Especially heat treatments, such as steam sterilisation, are becoming an important buyer requirement.

 

 

Supplies of ground ginger are relatively low (8% of the total ginger imports in 2017) but the volume increased on average by 10% annually between 2013 and 2017.

China has been excluded from the figure, as its supplies are out of proportion compared to the other supplies. Of all ground ginger imported from developing countries, 29% comes from China. However, China still mainly exports whole ginger to Europe.

Several countries have increased their exports of ground ginger to Europe. Between 2013 and 2017 Peru’s exports to Europe increased from 1.4 tonnes to 285 thousand tonnes (+280% annually), Indonesia’s by 45%, Thailand’s by 26% and Burkina Faso’s by 280%.

 

 

Search for healthier ingredients

The growing demand for dried ginger on the European market is stimulated by consumers searching for healthier ingredients.

Healthy living is one of the most important trends in Europe. Consumers perceive food ingredients such as salt, sugar and synthetic additives as unhealthy. These products are increasingly replaced by other products that also add flavour, such as spices and herbs.

Consumers use dried ginger for its promoted beneficial effects to health. For example, journals and food bloggers state that the consumption of ginger helps with digestive problems, the flu and stress.

Dried, ground ginger is sold by retailers in the spices segment; for example:

Due to its popularity, ginger is also increasingly used as a health supplement as well as in other food products such as tea and snacks. Examples are:

 

 

 

Growing popularity of ethnic cuisines

The demand for ethnic food in Europe is rising. Since dried ginger is an important ingredient in Asian dishes, it is becoming increasingly popular on the European market.

Examples of Asian recipes that are popular in Europe and that contain ginger are:

There are two main causes for the increase in the popularity of ethnic cuisines:

  • The multicultural population in Europe is growing. In 2014, 20% of newly immigrated Europeans were of Asian descent.
  • Other Europeans are increasingly interested in exotic cuisines. They are linked with the rest of the world through the internet and travelling. They can easily search for Asian recipes online and bring back recipes from their holidays to Asia.

 

 

 

Sustainability is on the rise

Sustainable sourcing is an important trend in Europe, especially in the United Kingdom, the Netherlands and Germany.

As a supplier, you will be increasingly faced with sustainability requirements from your buyer. Many buyers see sustainable sourcing as a must.

By certifying your ginger, you can proof your compliance with sustainable sourcing. However, certified ginger is still a niche market. It represents only a small section on the total European market for ginger. In addition, most buyers in the mainstream market are unwilling to pay more for certified products. As a result, it is important to discuss the opportunities for certification with your buyers before you become certified.

Certification does give you a competitive edge. For dried ginger, the main certifications are Organic and Fairtrade. For Organic certified ginger, the most interesting markets are Germany and the Netherlands. For Fairtrade certified ginger, the most interesting market is the United Kingdom. However, ginger represents only 3% of all spices and herbs certified by Fairtrade International in Europe (31 tonnes in 2015). Such data are unavailable for organic ginger.

 

 

3 . Which requirements should dried ginger comply with to be allowed on the European market?

You can only export dried ginger to Europe if you comply with buyer requirements for spices and herbs. Below, you will find more information on requirements that are specific to dried ginger.

Legal requirements

When exporting dried ginger to Europe, you have to comply with the following legally binding requirements.

  • Food safety: traceability, hygiene and control as specified in the General Food Law;

 

  • mycotoxins contamination: for ginger, the maximum level of aflatoxin is between 5.0 μg/kg (aflatoxin B1) and 10 μg/kg (total aflatoxin content B1, B2, G1 and G2). For ochratoxin, the maximum level is 15μg/kg;

 

 

  • microbiological contamination: your ginger is banned from the market if salmonella is found;

 

  • food additives and adulteration: spices and spice blends are rejected by custom authorities if they contain undeclared, unauthorised or excessive levels of extraneous materials;

 

  • maximum levels of polycyclic aromatic hydrocarbons (PAHs): contamination with PAHs stems from bad drying practices;

 

  • Irradiation: this process is allowed but not commonly used.

 

 

European buyers are increasingly requiring their suppliers to use steam sterilisation in order to combat the microbiological contamination of ginger. You could earn a significant premium if you can supply ginger that is sterilised at the source. However, investments in the necessary equipment can be very costly, at up to € 1 million.

Research is being conducted into alternatives to steam sterilisation, as this treatment negatively affects the taste of ginger. Currently, it is still the cheapest and safest method to combat microbiological contamination.

 

 

Additional requirements

Consider complying with the following non-legal requirements to ease market access. European buyers can use these requirements as selection criteria.

  • food safety certification as a guarantee: the most important food safety management systems in Europe are British Retail Consortium (BRC), International Featured Standards (IFS), Food Safety System Certification 22000 (FSSC 22000) and the Safe Quality Food programme (SQF). Always verify your buyer’s preference for a specific food safety management system, as some may prefer one system over the other. For example, BRC is developed by retailers in the United Kingdom and more commonly demanded on this market. If you want to target the United Kingdom, BRC may be more important;
  • Corporate Social Responsibility (CSR): companies have different requirements for CSR, such as signing their code of conduct or following common standards including the Supplier Ethical Data Exchange (SEDEX), Ethical Trading Initiative (ETI) or the Business Social Compliance Initiative code of conduct (BSCI).

 

Requirements for niche markets

If you want to enter a nice market such as organic of Fairtrade, it is essential that you comply with the following standards.

  • sustainable product certification: the major certification systems are Organic, Fair Trade and Rainforest Alliance;
  • selfverification: suppliers assess their own compliance with the sustainability code of buyers. Examples include Unilever’s Sustainable Agricultural Code (SAC) or the Olam Livelihood Charter.

 

Quality requirements

Product quality is a key issue for buyers in Europe. You need to comply with the Quality Minima Document published by the European Spice Association (ESA). This document is leading for the national spice associations affiliated with the ESA and for most key buyers in Europe.

The Quality Minima Document specifies the chemical and physical parameters dried that ginger needs to comply with when sold in Europe before crushing and grinding (after drying).

  • ash: maximum 8%
  • acidinsoluble ash: maximum 2%
  • moisture: maximum 12%
  • volatile oil: minimum 1.5 ml/100 gr
  • SO2: maximum 150 ppm

The ESA has not developed cleanliness specifications. As a result, European buyers often use the specifications for cleanliness stated by the American Spice Trade Association (ASTA).

 

 

 

Labelling requirements

Correct labelling is important for European buyers. To this end, pay extra attention to labelling your product.

For bulk ginger, you have to include the following information:

  • the name of the product
  • details of the manufacturer (name and address)
  • batch number
  • date of manufacture
  • product grade
  • producing country
  • harvest date (month-year)
  • net weight.

Other information that exporting and importing countries may require include the bar, producer and/or packager code, as well as any extra information that can be used in order to trace the product back to its origin.

 

 

Packaging requirements

For shipping, bulk whole dried ginger roots should be packaged in jute sacks (36-65 kg). It is less common but also possible to pack the roots in wooden boxes or linen corrugated cardboard boxes (60 kg).

Ginger processed in the form of slices or powder is packaged in multi-wall laminated bags of different weights ranging from 1 to 25 kg. Common weight classes are 12.5 kg and 25 kg.

 

 

4 . What competition do you face on the European market for dried ginger?

Your main competitors are other suppliers from developing countries. In 2017, these suppliers exported 113 thousand tonnes of dried ginger to Europe, accounting for €153 million. Of these imports, 93% was whole ginger.

China is Europe’s main supplier of ginger and also your most important competitor. The country accounted for 79% of all supplies from developing countries to Europe in 2017.

Other suppliers of ginger from developing countries are:

  • Peru (11% of total supplies by developing countries in 2017)
  • Nigeria (3.2%)
  • Brazil (2%)
  • Thailand (1.7%).

Peru’s market share has increased significantly, though its supplies are small compared to China.

Fresh ginger is an important substitute for dried ginger. Fresh ginger is used for cooking, at home or in restaurants, and in food and beverage manufacturing.

The production of ginger in China is mainly mechanised. Other small suppliers, such as Peru, conduct their production manually. As a result, China is able to produce and export large quantities of ginger compared to the other suppliers from developing countries. This fact makes it difficult to compete with China if you are a smaller supplier. If you want to compete with China, you should be able to:

  • deliver stable supplies of ginger, both in quantity and in quality;
  • comply with delivery times;
  • comply with food safety requirements.

You can also explore opportunities on niche markets such as organic and Fairtrade, or for specific applications such as beverages, which have specific requirements.

If you want to sell your ground ginger to Europe, you are competing directly with European processors. Your buyers could ask you to provide the same service as European re-exporters. You will have to make sure that you comply with their requirements such as short supply times and steam sterilisation.

 

 

 

5 . Through which channels can you get dried ginger on the European market?

See our study of Channels and segments on the European market for spices and herbs. The channels for ginger do not differ significantly from those for other spices and herbs.

 

6 . What are the end-market prices for dried ginger?

Ginger is an annual crop. Its prices fluctuate between one harvesting season and the next. The price of dried ginger also depends on the price of fresh ginger.

In early 2018, dried ginger prices were relatively stable, in combination with ample supply of good quality ginger. In the beginning of 2017, international prices  ranged between US$ 6,000 and US$ 7,000 per tonne.

Global market prices for ginger are strongly influenced by the largest producer of both fresh and dried ginger, China. However, traders often prefer ginger from more expensive suppliers in Peru and Brazil, for example. They prefer these suppliers because of their higher quality.

Figure 5: Indicative price breakdown for ginger

 

Figure 5 gives an indicative price breakdown for ginger. European retail prices for ginger are much higher than global trade prices. However, exporters from developing countries do not necessarily profit from these trade prices. European processors and retailers add large price margins.

The margins that you can receive as an exporter may differ. These margins are influenced by various factors such as:

  • Country of origin;
  • Current and expected future harvest situation;
  • Quality of the raw material;
  • Level of processing;
  • Level of demand;
  • Trends in prices.

Margins and profits can be higher for you as an exporter if you are able to add value locally. For example, by further processing or certification, you can create a competitive edge and benefit more.

 

To register as a supplier — follow this link —

http://www.cokodeal.com/index.php?option=registration&task=sellerregister

Article credit: – cbi.eu

For buyer inquiry

Email: cokodeal@yahoo.com —- service@cokodeal.com —

Whatsapp +2348163229560