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April 06, 2008

West African shea butter production increases

Three years ago, Jacob Shinka first heard the English word for kadanya or maikade, the shea butter mixed into soap and used in cooking during his childhood in Nigeria’s Kebbi State. He also began learning about shea butter’s export potential and began attending Trade Hub workshops in Ghana and Nigeria to gain the knowledge needed to launch his own shea enterprise.

Today, Shinka’s Meena Agro Oil is benefiting from a swiftly rising tide of global interest in edible and cosmetic shea, which is spurring investment, new business and grass-roots education across West Africa – as well as government evaluations of shea’s value to national economies.

Shea nut exports from West Africa now total an estimated $100 million, said the Hub’s shea specialist, Dr. Peter Lovett – who first began tracking sales 15 years ago. In 1994, only 50,000 tons were exported at an average $150/ton, bringing in less than $10 million to the region. Prices have increased – in Ghana, the current average is $400/ton – as have volumes: this year’s estimated crop is 250,000 tons. Yet shea is still cheaper than other vegetable fats, such as cocoa, the price of which peaked at over $3,000/ton in recent months.

This largely explains shea’s popularity: The bulk of West African shea nuts and butter still goes to Europe, where it’s used as a less expensive alternative to cocoa butter in chocolate and pastries. Shinka sells his butter to one of the world’s largest providers of agricultural products through a London-based trading house. Last year, he shipped 120 metric tons, he said; this year, he has a contract for 1,000 tons.

“They said they want to test our capacity for producing high quantities of high-quality butter,” Shinka said. “As much as we can produce, they will buy.”

Yet Shinka learned the hard way that volume isn’t enough. In late 2006, he leased a factory in Nigeria, which mechanically processed seven tons of shea butter a day. But the quality was so poor that the buyer reduced the price and threatened to cancel the contract altogether. Shinka went back to villages, which have traditionally produced high-quality shea – as long as they follow improved processing procedures.

With guidance from the Hub including on-the-ground assistance from Lovett, Shinka has trained hundreds of rural women on proper nut selection, sun-drying and keeping impurities out of the final product. Today, he collects butter from a network of 100 women’s cooperatives in Kebbi State and transports it by refrigerated truck to a warehouse in Lagos. Quality remains high, even as quantities increase, thanks to the emphasis on training along the entire value chain – a key lesson from the Hub’s workshops, studies and export guides.

The Hub has organized shea-quality trainings in rural Benin, Burkina Faso, Chad, Ghana, Nigeria and Mali, sometimes in cooperation with the U.S. Peace Corps. Most recently in mid-March, Lovett joined a group of Peace Corps Mali volunteers and counterparts in Burkina Faso, where cosmetic-grade shea butter is sold to European cosmetics giant L’Occitane. The group came to observe shea processing facilities there, which are increasingly organized and professional. Processing centers featured clean warehouses, uniformed staff and high-quality containers for the butter – one also housed a nursery school, garden and laboratory. Several have begun producing organic along with conventional butter. One group, UGPPK in Leo, has received both organic and fair-trade certification.

“These places have come up in leaps and bounds in the past three years,” Lovett said.

Buyers are increasingly demanding such certifications, as seven West African shea producers discovered in March at the Natural Products Expo West in California, one of the cosmetic industry’s leading tradeshows. The Hub’s bamboo-walled West African pavilion in the “Hot New Products” section introduced exporters to wholesalers, distributors, brokers and traders, as well as the full retail spectrum: supermarkets, pharmacies, co-ops and ethnic shops, among others. Exporters from Burkina Faso, Ghana and Senegal made a total of 228 contacts, including such large retailers as Burt’s Bees, who were primarily interested in fair-trade certified bulk butter. Smaller retailers expressed more interest in pure unrefined butter for skin and lip care. Demand shows no signs of cooling: The newest U.S. trend in shea is a dietary supplement to soothe arthritis and joint discomfort.

Back in West Africa, governments are focusing more on shea as a player in economic growth. Shea is Burkina’s largest agricultural export after cotton, for instance, and both that country and Mali have developed national strategies for the crop, including research to develop better crops and extension services to share knowledge with farmers and grass-roots producers. Ghana recently formed a national steering committee on shea to help plan the growth and sustainability of the industry.

Meanwhile, Shinka continues to improve the industry in Nigeria, helping to organize an April workshop along with the Shea Butter Processors and Producers/Marketers Association, Niger State’s Ministry of Commerce and GTZ, the German development agency.

Vanessa Adams, the Trade Hub’s director of enterprise development, said the industry is maturing and developing different production levels, pulling new players like Shinka and creating jobs and investments across the region.

“Not only is the shea export business booming but there is increased interest in investing in industrial processing and cosmetic production in West Africa,” Adams said.

West Africa Trade Hub

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