The Basics Of How To Start A Palm Oil Business In Nigeria

How to Start A Palm Oil Business In Nigeria

Do you know that many people in Nigeria engage in the palm oil business every day and make a lot of money? Do you wish to start a Palm oil business in Nigeria? Do you wish to know which part of the country palm oil can be found? Are you thinking of how you can start a palm oil business?

Are you asking yourself whether the palm oil business is profitable?

We will show you all you need to know about starting a palm oil business in Nigeria.

For many centuries, palm oil has been an important part of day-to-day consumption products in most parts of Africa, especially in Nigeria in the region of West Africa. It’s a great source of income in the eastern and western parts of Nigeria, it’s common in the Igbo and Yorubas tribes.

Palm oil is a red liquid substance extracted from palm kernel. There are processes it goes through before palm oil can be extracted and refined into finishing goods. It can be preserved in many ways, either by sealing in bottles, cans, or gallons. And it is available for sale in open markets without any lab testing or going through any purification process because it’s a natural product extracted more naturally.

Palm oil can be transported anywhere in Nigeria and anywhere in West Africa, it’s even now a product being exported to other countries outside Nigeria and Africa as a whole, it’s reliable good because it has a long life span. Palm oil has made many traders rich because it’s easy to sell to almost 90% of Nigerians and up to 60% across Africa and 40% across the world.

Nonetheless, the palm oil business is very lucrative and profitable in Nigeria, as a recent survey carried out turns out that almost 70-80% of palm oil traders in Nigeria and across Africa are making it big.

The palm oil business is very easy to start and it doesn’t take any kind of process or government approval to start unless been decided by the market traders association.

Let’s work you through our frequently asked questions.

FREQUENTLY ASKED QUESTIONS ABOUT THE PALM OIL BUSINESS IN NIGERIA

What Are The Risk In Palm Oil Business?

1. One of the risks in the palm oil business in Nigeria is the poor quality of palm oil produced due to a lack of facilities.

2. Another risk is bad government policies which may one day affect the business of palm oil.

3. If there are no good storage facilities it will result in a loss in business.

What Is The Current Price Of Palm Oil In Nigeria?

The current price of palm oil in Nigeria ranges from ₦1400 to ₦1500 per liter as of 11th August 2023. And you should know that the prices will be fluctuating daily due to market dynamics.

What Month Is Palm Oil Cheap In Nigeria?

According to “Crystago Palm Oil Mills”, the best months to get palm oil is between the beginning of March and the end of May.

Is Palm Plantation Profitable?

Yes, it is no longer a hidden fact that palm plantation is very profitable, and for many decades, palm tree plantation always guarantees a large harvest.

How Much Is 25 Litre Of Palm Oil In Nigeria Now?

Locally-produced 25 liter of palm oil as of 11th August 2023 is ₦28,000 to ₦35,500.

Where Can I Buy Palm Oil Cheap In Nigeria?

If you are looking for where to buy palm oil cheap in Nigeria then the following 4 ways is how you can buy cheap palm oil:

1. To get palm oil cheap, you have to source it directly from farmers. This will give you a better chance of negotiating fair prices.

2. Wholesale markets like Ariaria international market in Aba, and the Oyingbo market in Lagos.

3. Buying from local markets like mile 12 in Lagos state, Ibadan (Bodija market), and Garki market which is located in Abuja.

4. Finally, you can buy cheap palm oil from known palm oil-producing states like Abia State, Rivers State, Enugu State, Edo State, Akwa Ibom, Cross River, Ondo State, Anambra, Imo State, Delta State, etc.

The above-mentioned states produce palm oil in larger quantities and they are likely to offer cheaper prices than resellers.

How Much Capital Is Needed To Start A Palm Oil In Nigeria?

Depending on the type of palm oil business you want to start. If it is buying and selling palm oil with at least ₦200,000 you can get started. But if it is a palm oil plantation or palm oil extraction mill you will need more than ₦1 million to get started.

Can I Start Palm Oil Business With 50k?

Of course, you can start a palm oil business with 50k but it will just be for 25 litres of palm oil. However, to enjoy the profits in this business it is advisable to start with at least ₦200,000.

How Profitable Is Palm Oil Business In Nigeria?

Palm oil is a daily routine in Nigeria and it is a daily use product both industrially and domestically. So its profitability isn’t underrated. However, as Nigerians are patronizing more locally produced palm oils, starting it as a business will be very profitable.

What Is The Demand For Palm Oil In Nigeria?

The demand for palm oil in Nigeria has exceeded 1.8 million tonnes as of 2022. It is expected to hit 2 million tonnes by the end of 2023.

Are There Any Opportunities In Palm Oil Business?

Yes, there are three main opportunities in the palm oil business which are palm tree plantation, which involves the planting of palm trees to produce palm fruits and also to sell the palm fruits to those processing it.

The second palm oil opportunity is the “palm oil mill”. In this type of business, you buy palm oil processing machines and set up your palm oil extraction mill in a cool location.

Lastly buying and selling palm oil is the most common way of starting a palm oil business.

Meanwhile, there are also opportunities like palm oil transportation services, selling of palm oil equipment, palm oil exportation, and palm oil marketing.

How Can I Sell And Market My Palm Oil?

The perfect way to sell your palm oil is when the price of palm oil has gone up. The palm oil business evolves around buying palm oil at cheaper prices and selling at higher prices.

Furthermore, you can sell your palm oil at the market or you sell directly to the next available buyer depending on how you choose to sell your products. Meanwhile, what mostly attracts buyers is selling pure palm oil for unbeatable prices.

What Are The Major Problems Experienced In The Marketing Of Palm Oil In Nigeria?

1. You may experience problems if your palm oil is of low quality.

2. Bad roads are another major problem in the marketing of palm oil and it also leads to an increase in palm oil transportation fees.

These are the two major problems experienced in the marketing of palm oil in Nigeria.

What Are The Requirements To Start A Palm Oil Business In Nigeria?

The following are the requirements to start a palm oil business:

1. A storage space: Finding a very cool storage space for storing your palm oil is one of the unavoidable requirements when it comes to starting a palm oil business.

And also know that your storage space may come in the form of a shop.

One of the best ideas when it comes to renting/getting a space is to be near a local market. This will make it easier for you to get to your customers effectively.

2. Identify where to buy your palm oils: Just like we said earlier you can buy directly from farmers, wholesale markets, or you buy from local markets. It all depends on the market or supplier closer to you.

Next is to make arrangements on how to transport the palm oil that you have bought from your supplier to your storage location.

3. Sell your palm oil: You have to monitor the palm oil market to know when the prices of palm oil go up. And remember to sell at a very good price.

Conclusion

Starting a palm oil business can be a lucrative venture, this is because Nigerians rely on palm oils for their day-to-day cooking. Also, with the demand growing daily, a palm oil business is a recommended business idea for Nigerians.

Ambassador Victor Chidera
Ambassador Victor ChideraAmbassador Victor Chidera is a business consultant, writer and a blogger. He provides lots of professional and expert advice to small businesses, entrepreneurs and organizations. He has many years of experience in business, teaching field, and research work. And his aim is to provide business articles that matters to you both nationally and internationally.
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