Pound for pound, the export business remains one of the most profitable businesses in the world when compared with many other businesses operating in several other industries. Because of its high prospect for growth and profitability, many entrepreneurs generate thousands, millions, and some billions of dollars yearly in revenue trading agricultural products, solid minerals, or petroleum products.
While there are many winners in the export business, there are also many others who pretty much lose their entire investments or make far lesser than they could have earned due to inexperience.
This focuses on the latter, and gives entrepreneurs looking to venture into the export of agricultural products an edge by showing you 9 highly-profitable and lucrative agricultural products you can start exporting, and depending on where you shipping to, earn between 20% to over 100% in profit margins:
1). Cashew Nuts:
At the start of the cashew season, the cost of cashew nuts locally is very cheap, and if exported to international buyers at this time, the profit margins could be around 30%.
But then, the profit margins are highly dependent on where the buyer is from, the state of the cashew nuts (whether raw or processed) and the price negotiated.
If you are shipping raw cashew nuts, as at January 2020, the price is between $950 to $1,050/mt and the profit margins are between 28% to 37% depending on the price you buy from the locals for export.
If however, you are shipping processed cashew nuts at this same time, the price is between $6,000 to $11,000 per metric tonne depending on where it is going to, and the profit margins are between 65% to 150% since four metric tonnes of raw cashew nuts produces one metric tonne of processed cashew nuts, and since you are buying from the local community, your price is at its barest minimum.
But essentially, shipping to Europe is far more profitable than shipping to Asia.
Ginger is a widely purchased commodity from all over the world and Nigeria produces some of the best quality ginger in the world.
While the vast production rate & quality in the country is impressive, the more attractive part of the trade is the fact that it has a high economic value.
As at January 2020, fresh ginger is sold internationally in Asia at around $500 to $800 per metric tonne and dry ginger is sold at around $1,500 to $1,700 per metric tonne.
The cost of the fresh and dry ginger puts their profit margins at between 20% to 32%.
The interesting part is if you are selling ASTA grade (higher quality) to Europe, it costs up to $2,100/mt and in many cases, costs more, pushing the profit margins to around 60% to over 100%.
3). Dry Hibiscus (Zobo Leaves):
Dry hibiscus is one of the most profitable agricultural products to export from Nigeria. It goes for around $1,550/mt as at January 2020 if shipped to South America and many other parts of the world at a 20%+ profit margin. But if shipped to the United States, it goes for between $1,800 per metric tonne to sometimes over $3,000 per metric tonne at a high-profit margin of between 60% to sometimes over 150%.
The price structure ultimately depends on where the end buyer is, who the end buyer is and what exactly they’re using it for.
4). Sesame Seeds:
Sesame seeds have a wide range of uses ranging from its application in confectionaries and also in the production of sesame oil.
If you ship raw sesame seeds unhulled, the profit margins are around 14%. You process to hulled and colour separate, the profit margins rise to 18%, but if you process and ship the sesame oil instead, the profit margin rises to more than 50%.
But depending on the where the buyer is from, and the price you procure the commodity from the farmers, the profit margins could greatly rise or slightly drop.
5). Black Stone Flower:
This is one of the most unpopular plants in the world. Mostly only people who trade it know about it, but the profit margins on the trade if procured from the source and shipped to a place like India can range from 15% to 25%.
If shipped to a place like Saudi Arabia, the profits rise to between 50% to 100%.
Depending on how you purchase and where you ship to, the profit margins could be greatly high or extremely low.
6). Shea butter:
Shea butter is one of the most exciting products to trade internationally because depending on where it is going to, who the buyer is, and what they’re using it for, the profit margins could be between 20% to over 300%!
Shea butter is made from the Shea nuts. So essentially, Shea butter is an already processed agro commodity.
What makes shipping Shea butter from Nigeria interesting is the fact that the cost of producing it as at January 2020 is a total of around $900 to $1,200 per metric tonne, but it could be sold to some direct users around the world for between $2,200/mt to sometimes more than $6,000/mt.
The key to trading Shea butter and maximising your profit margins is in understanding the right people to sell to.
Not just anyone can be your client if you hope to make the most out of each trade. You need to cut off all the chains and go straight to the factories that need it.
It’s also interesting to know that Nigeria is the largest producer of the Shea nut fruit used in producing Shea butter in the world.
Peanuts are one of the oldest traded agricultural products worldwide. The best part is they’re cultivated in very large commercial quantities in Nigeria, and since the international price is regulated, anyone trading it can earn a consistent 30% profit margin, provided they’re buying directly from the source.
As earlier said, everything starts and ends with where the buyer is from, who the buyer is, and what exactly they want to use the product for.
8). Cocoa Beans:
Cocoa beans are one of the most demanded agricultural products in the world. Their prices are regulated internationally, and the profit margins on each sale could be between 15% to 25% depending on how you are sourcing the products and where the buyer is from.
While trading cocoa beans can be great, processing to cocoa butter or chocolates and exporting greatly increases the profit margins from the 20% range to between 30% to 50%. And the further it is broken down, the higher the margins can be.
While there are hundreds of other agricultural products that can be exported profitably from Nigeria and other parts of Africa to international buyers located all over the world, it is important to note that those mentioned above are more common to be exported profitably as long as you are dealing with the right type of buyers.
You shouldn’t look to do business with just anyone. But to rather strive to find the end using factory of the products, or suppliers selling directly to the end factory, and market your services to them at great prices.
You should also strive to target the European and American markets as they pay up to twice or more what the Asian market will pay for whatever products or services you have to offer.
By finding and targeting the right group of people, you would always be in a great position to grow a successful export business.