EXPORTING CASSAVA FROM NIGERIABy: Ajakumbi Baba Usman
WHAT IS CASSAVA Root tuber cropGrown in Africa, Asia and the LAC.
Uses of Cassava• Cassava is consumed as food only in the developing countries • Mixing in making Animal feed
PRODUCTION STATISTICSWorld production of cassava root was estimated to be 184 million tonnes in 2002, rising to 230 million tonnes in 2008 (FAO). The majority of production in 2002 was in Africa-99.1 million tonnes . Asia-51.5 million tonnes .Latin America and the carribean-33.2 million tonnes . Nigeria is the worlds largest producer of cassava. Thailand is the largest exporter(FAO-UN). – 77%
EU MARKET• The European Union feed market for dried cassava is well established. • The EU has allocated a quota of 145 000 tonnes to World Trade Organisation members, excluding Thailand, Indonesia and China.• This quota has never been reached. But it is noted by traders that the pig-feeding industry in Bretagne could absorb as much as 10 000 metric tonnes per month of chips from West Africa. • The chips would of course have to be at appropriate price, quality and supplied throughout the year
CASSAVA CHIPS Specification of cassava chips for livestock feedA general specification for cassava chips intended for Parameter Percentage export to the European Community for use in Moisture (maximum) 10-14 livestock feeds is given in Table. Chips should be white or near white in Starch (minimum) 70-82 colour, free from extraneous matter, Total Ash (maximum) 1.8-3.0 moulds, insect infestation and damage and possess Crude fibre (maximum) 2.1-5.0 no peculiar odours. In addition, shipments of chips must not contain Sand and other extraneous matter (maximum) 3 significant amounts of dust, as this is considered Cyanide (maximum) 100 mg/kg unacceptable by European importers. Dimensions (maximum in cm) Lenght 4-5 cm Thickness 1.5 cm
TCG Nig . • TCG entered the cassava chip market in 1993 in partnership with Tranex, a livestock feed brokerage based in Belgium, that supplies feed ingredients to a number of feed millers in Belgium and France.• Initial exports were of negligible size but in 1996 the company exported 19,725 tonnes to the EU. • During this period the company purchased cassava for US$30 per tonne (farm gate price) and sold cassava chips for anything up to US$152 per tonne.
TCG Process of Exporting Cassava Farmers forward 6states,where Farmers group of batches to zonalfarmers produce TCG buying centers Broker takes Transported by Transported byresponsibility to Ship to TCG feed road to TCG distribute to broker in Europe warehouse feedmillers
TARIFFS Under Nigerias Export Prohibition Act;• export of certain agricultural goods is prohibited for purposes of domestic food security and of local processing. • Agricultural products banned from export include: raw hides and skin, timber (rough or sawn), unprocessed rubber latex and rubber lumps, rice, yams, maize, and beans. • An administrative levy of US$5 per tonne applies to exports of cocoa beans, and US$3 per tonne to exports of other agricultural raw materials. • Zero tariff for cassava exportation.• Exports are subject to a sanitary certificate (animals and related products) or to a phytosanitary certificate (vegetal goods).
PAYMENT METHODS • Exporter and Importer sign the purchase contract• Importer requests for Letter of credit (LC) and release funds to its Bank • Importer’s Bank Issue LC and sends it to the Exporter’s Bank • Exporter’s Bank advises the LC the Exporter • Exporter ships the goods to the Importer • Exporter forwards shipping documents to its Bank • Exporter’s Bank forwards shipping documents to the Importer’s Bank • Importer’s Bank transfers the funds to the Exporter’s Bank • Exporter’s Bank pays the Exporter • Importer’s Bank release the shipping documents to the Importer • Importer clears its goods using the shipping documents
DOCUMENTATION The documentation is for all exporters, agencies that deal with exporting good from Nigeria. Export business worldwide is mainly about documentation. This is because much reliance is placed on documents relating to price, quantity, packaging, shipment/movement, origin etc., in a bid to confirm adherence to stipulated procedures. The buyer for instance needs documents that would enable him clear the goods in his country while the seller/exporter needs documents to ensure that he will get paid. Consequently, goods may not be exported to destination outside Nigeria unless the exporter has complied with the prescribed documentation requirements. Anyone willing to engage in export business is required to register with the Nigerian Export Promotion Council (NEPC).An exporter is required to complete and register Form NXP with an Authorized Dealer (any Commercial or Merchant Bank) of his choice. The objectives of completing the Form NXP are to ensure:That goods to be exported meet with the buyer’s expectation (order) since the goods will be subjected to inspection, conducted by relevant Government agencies. Depending on the export items, these include: Plant Quarantine, (Federal Ministry of Agriculture), Federal Produce Inspection Service (Federal Ministry of Commerce and Tourism), National Agency for Food and Drugs (Federal Ministry of Health) and Standards Organization of Nigeria (SON).
DOCUMENTATION CONT’D That only goods that have satisfied the buyer’s order have been shipped – the Nigeria Customs Service on shipment will duly certify a copy of the form. That proceeds (payment) due to the exporter are duly repatriated within 90 days of shipment of goods and credited to his Domiciliary Account maintained with the Authorized Dealer that proceed or registered the Form NXP. Exporters are allowed foreign exchange chargeable to their domiciliary accounts for the following export promotion activities: Business travel allowance Export-oriented business trips duly certified and approved by the bank where the domiciliary accounts is maintained. Export-related activities such as trade missions, trade fairs, export marketing, research etc.The exporter is also to sell part or all of his export proceeds in this Domiciliary Account for Naira to any Authorized Dealer at the prevailing buying rate in the Autonomous Foreign Exchange Market (AFEM). Export proceeds from Domiciliary Accounts could also be used by exporter for imports provided the proceeds have been fully repatriated in the first instance.
LAW REGULATIONS FEDERAL MINISTRY OF COMMERCE The Federal Ministry of Commerce (FMC) is responsible for articulating of trade policies for Nigeria within the world trade organization framework. It is also charged with the following responsibility:-Export through the NIGERIAN Export Promotion Council (NEPC) Import Foreign exchange management External trade Domestic trade Weight and measures Trade malpractices Consumer protection council. Nigerian Export Processing Zones.
Other regulatory agency NIGERIAN EXPORT PROMOTION COUNCIL The Nigerian Export Promotion Council (NEPC) was established through the Nigerian Export Promotion Decree No. 26 of 1976 with the following. MANDATE To promote the development and diversification of Nigerias export trade. To assist in promoting the development of export-related industries in Nigeria; To spearhead the creation of appropriate export incentives;To actively articulate and promote the implementation of export policies and programmes of the Nigerian government. it implements its mandate under four key tasks, namely: - Export development - Export financing and incentives - Human resources training and development - Coordination and cooperation with multilateral institutions
PROCEDURE AND DOCUMENTATION REQUIREMENT A duty completed Form NXP A proforma invoice A sales contract agreement, where applicable NEPC registration certificateRelevant certificate of quality as issued by one or more of the agencies involved in exporting Shipping documents e.g. bill of exit, bill of lading etc. Other certificates e.g. Form EUR-1