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How to Buy and Sell Finished Palm Oil Products in Nigeria for Profit

Question-1: First things first: What is Red Palm Oil? 

Answer-1: Red palm oil is the natural oil extract from the palm tree fruit. 

You and I know the importance of red palm oil in Nigeria, that:-- 

1. There is no home in Nigeria that does not cook with it;

2. There is no tribe, true religion or belief in Nigeria that forbids it;

3. It is generally accepted and widely used: not only in Nigeria, but also cacross West African Region and wherever Africans live in the world.

The Health Benefits:

Using palm oil for cooking has greater health benefits over vegetable oil; as it is said to have a very high concentration of vitamin E in the finest proportion.

Vitamin E (alpha-tocopherol) is key for strong immunity and healthy skin and eyes. It is a fat soluble antioxidant; and contains substances that protect cells of the body from damage. It also protects the body against toxins such as air pollution, pre-menstrual syndrome, eye disorders such as cataracts, neurological diseases such as Alzheimer's disease, and diabetes. It is also rich in carotene and possesses strong healing power.

For people who do not use red palm oil in cooking their soups or other meals at all, they have to resort to using its supplements to support or protect themselves. Specifically, many people use vitamin E supplements in the hope that the vitamin's antioxidant properties will either prevent them from having diseases; or if they already have some diseases, the vitamin E supplements would treat such disease conditions. 

In summary, your body tends to get better health benefits as a result of the presence of vitamin E in red palm oil ingestion in your soups and foods, rather than in drinking commercial vitamin E capsules or supplements. 

Question-2: Why Trade On Red Palm Oil?

Answer-2:  Because there is a ready-made market for it in Nigeria;

And it is highly a profitable business.

Red Palm oil is one of the major agro-allied commodities that is constantly in high demand in Nigeria. There is never a time it would not be a ‘hot cake’ in the market; and it is consumed at the same rate as rice and garri. 

For instance, palm oil is currently sold in Lagos and other major cities across the country at about 8,000 Naira for 25liters Jerry-can size; but if you go to the farm areas where it is produced in quantity, you can get the same 25liters for as low as between 4,000 Naira – 5,000 Naira. You can then imagine the gains on top!

There are even times of the year that you may get this product at 2,500 Naira – 3,000 Naira per 25litres. If you can get it in quantity during the time of surplus and store it for some months, you will sell at more than 100% profit. Each year, palm oil is usually surplus around December to April and sells at the highest around July to September.

If you invest just 100,000 Naira and wait for 4 months, you will be making profit of at least, 120,000 Naira – 150,000 Naira after recouping your initial capital without any substantial effort. That is a good deal by all standards; and the more money you invest, the more profits you will make.

If you decide to trade all season, that will even be better. All you need to do is to find out where it’s being processed in much quantity and buy at cheap price from there, transport it to the city and sell at good price, repeat your journey as often as you can and make money all year round.

So, :---

• Are you a Retiree? 

• Are you an undergraduate student who wants to do some part-time agro-allied business?

• Are you a part-time student of a tertiary institution in Nigeria or a fresh graduate/NYSC person who would want to earn some little money by the side from a lucrative ago-allied business?

• Do you have little idle cash lying in your bank account and you are looking for a means to earn extra income?

• Or can you raise little sum of money from your friends, relations or contacts to start this business? 

If you’ve answered ‘YES’ to any of the questions above, then,

Please find analyzed below for you, an in-depth guide on how to make money by buying and re-selling finished palm oil products in Nigeria.

The Business Aspect:

When most people hear that palm oil business is very lucrative, they quickly dismiss the idea of taking a plunge because starting up a palm oil processing company requires much more capital than they can quickly afford.

But the truth is that you too can tap from the opportunities in the palm oil business without necessarily having to set up your own processing company or starting a palm plantation. 

How can you safely do this to a successful end, you may ask

You can achieve this by buying and selling palm oil for profits. In fact, you can make millions just by buying, storing, and reselling palm oil. One of Nigeria’s billionaires, Chief Orji Uzor Kalu (former Governor of Abia State), started out in business as a palm oil trader; and he made millions from this business long before he came into limelight.

Before I discuss the steps involved in buying and selling palm oil for profit, let me enlighten you about the commodity and its marketability. (I am assuming you do not know anything about it before now. Pardon me if you already did).

Four (4) Reasons Why You Should Start Trading Palm Oil for Profits

i. Palm oil is a natural extract from the red palm fruit. It is orange or yellowish red in color, and it is widely produced in West African countries and in Far East countries such as Malaysia and Indonesia. In these countries, it is widely consumed by the natives, and it is also exported to neighboring countries.

ii. Palm oil owes its huge demand in countries such as Nigeria and Malaysia in part to its huge population and health benefits. Palm oil is a good source of vitamin E, which promotes healthy skin. It is also rich in carotene, which enhances vision. And most importantly, unlike most other oils, it doesn’t promote the accumulation cholesterol and low-density lipoproteins that are harmful to the body. 

iii. Another reason why palm oil sells well in the above-mentioned countries is its relative cheapness when compared with other edible oil, and its relatively long shelf life. With proper storage, palm oil can last up to one year without losing its quality.

iv. In Nigeria and other West African countries, virtually every household cooks with palm oil. So, you can imagine how much profit you can make from the market in these countries.

With the above in mind, let’s now discuss how the business of buying and selling palm oil works. It goes without saying that this business simply involves buying palm oil and selling palm oil, but there are two methodologies of running this business; and you are free to choose any of the two or even combine both.

How to Make Money Buying and Selling Palm Oil

The first model involves buying the commodity, adding some margin, and selling to the next available buyer. Though you won’t make huge profits with this model, you will make smaller profits on a consistent basis. The downside of this model is that you may be badly hit by sharp drops in the price of the commodity, which happens occasionally. But there are two sides to this possibility; you can make huge profits during occasional price surges as well.

The second model involves buying during the time of the year when the commodity is abundant, and selling only when it becomes scarce. Usually, in Nigeria, palm oil sells cheapest between February and April (because it is abundant during that time of the year), and market prices go up between September and January.

So, if you buy 1000 liters of palm oil when it’s cheap, keep it, and sell it when the prices go up, you can make between 100% to 200% profit or even more depending on the scarcity and on your location within Nigeria. It’s the same story in other countries where there is huge demand for palm oil.

In Nigeria, a 20 liter can of palm oil sells for 3,000 Naira – N4,000 Naira during the abundant season (depending on your location). During the scarcity period, that same 20 liter can goes for 6,500 Naira – N8,000 Naira. In Nigeria, palm oil can be sourced at a cheap price in places such as Edo, Delta, Abia, Imo, etc and resold at a profitable price in places such as Kano, Lagos, Kaduna, Abuja, etc. Most times, traders record huge profits by adopting the second model; but it usually requires larger capital than the first model. Having explained the methods of running a palm oil trading business; let’s now discuss the steps involved in starting the business.

How to Start Buying and Selling Palm Oil for Profits

1. Get your storage space

You will need to secure some pace for storing your palm oil, regardless of the business model you choose to adopt. If you have some storage space right in your home, that would guarantee rest of mind. But it would be better to have your storage space close to where your customers are. So, renting a shop near a local market around you is a very smart idea. In Nigeria, palm oil is best stored in big blue drums / barrels, in a cool place away from direct sunlight. It takes about 8 – 10 (20liter) gallons to fill a barrel.

2. Arrange with suppliers

Aside customers, your business needs suppliers to thrive, since you are not processing the commodity yourself. Try to find suppliers that produce high quality palm oil. You may need to conduct thorough research before making your choice because the success of your business would hinge largely on the quality of the palm oil you get from your supplier. From personal experience, i can say that good palm oil can be sourced from Imo state in places such as Ngor Okpala, Ihitte Uboma, Orlu, etc.

3. Decide on transport arrangements

You would need to transport your palm oil from the supplier’s location to your shop or storage location. And in some cases, you would need to transport palm oil to your customers as well. (In fact, you can make more money by charging extra for delivery. Buyers would readily pay for the convenience). Most times, palm oil are best transported in gallons and if you are transporting from Eastern Nigeria to either the Western or Northern part of the country, you can use the services of popular transport companies such as The Young Shall Grow Motors, G.U.O Motors, etc. If you have a van or truck to yourself, that would be fine. But if you don’t have one, you would need to hire one each time you need to transport your commodity.

4. Market and sell your product

To make profit, you need to find buyers for your product. You would easily attract them if you offer high quality palm oil for unbeatable prices. Depending on your chosen model, you can choose to sell your commodity to the next available buyer, or wait until prices go up before selling.

Business Plan:

You can make over 1 million naira this season storing and reselling red palm oil and I am going to show you exactly how to do it. It’s not difficult at all; in fact it is one of the easiest business you can do in Nigeria and make quick money within four months. I happen to know places in Nigeria where you can get this product at cheap prices and place where you can sell it at good price, I am going to make everything clear to you on this post…

How To Trade On Palm Oil Commodity

1. Secure a Shop – You will need a shop or any safe place for storage. If you have your own house, that will be nice, just dedicate one room for the storage. However, it will be better if you can rent a shop specifically for it preferably near the market. 

2. Look for Places to Buy in bulk – There are many places in Nigeria from where you can get palm oil to buy in great quantities. And when you buy in quantities, you can get this product at very cheap prices. So, for your added information, quality palm oil is available in bulk in various parts of:--

i. Ile-Oluji and Okiti-pupa areas (+ their suburbs) of Ondo State;

ii. Okada Town Area of Edo State; 

iii. Isiokpo/Elele Areas of Rivers State; 

iv. Ngor Okpala, Ihitte Uboma and Orlu Areas of Imo State;

v. Obhowo/Mbaitoli areas of Abia State and 

vi. Certain towns in Cross River/Akwa-Ibom States. 

vii. However, if you are very serious about this business, and you have sufficient capital to invest in it, your best bet to look for palm oil in very large quantities and at very reasonable prices is Abakaliki Area of Ebonyi State. That is the “home base/capital city” of original, high quality palm oil products in Nigeria. 

You can travel round these states and source from the various local markets and local palm oil processors there. 

Moreover, there are people who already know these areas and buy in bulk from them in large quantities to transport to Lagos for re-sale to stockists.

So, as a starter stockist, and if you are based in any of the south west states, you can also focus on the major base of palm oil products at Ketu/Mile-12 Market, Mushin/Ojuwoye, Agege/Oke-Odo + Sura-Mogaji Markets of Lagos State, as well as Bodija and Aleshinloye markets in Ibadan. You will be able to get your products to buy in quantities from these markets too.

Transport Your Goods – If you have your own truck or van, that will be fantastic but if not, you’d have to make do with hiring. Buy everything you want to buy, get a truck to transport it to your base and store it in your shop. Add the transport cost to the original purchase price to get your final cost price to your shop. That will enable you determine your selling prices and realize the profit potentials therefrom.

Sell Your Goods – Wait until the price goes up then you open your shop and sell at a very good price. It is a perfect way to invest money instead of keeping it to the bank with peanuts paid as interest on fixed deposit. It is like buying property and reselling at higher prices later.

Here is wishing you a profit-pulling business in buying and selling finished palm oil products in Nigeria.