The Tree Crops Development Authority’s (TCDA) has set a minimum price for raw shea nuts; however, some local shea processors are calling for a more transparent and consultative pricing regime.
The processors want a system that reflects market dynamics and protects the local industry, because activities of middlemen and large multinational corporations exploit the lax enforcement, drive-up prices and deprive local processors of supply.
They are also calling for an absolute ban on the export of raw shea nuts to stem an imminent shortage.
The TCDA set a minimum price for 1kg of raw shea nuts at GH¢9.01 – effective July 1 – and forms part of measures put in place by the authority to enhance sustainability, protect local producers and ensure international competitiveness within Ghana’s shea sector.
A bag of 85kg costs about GH¢765.63. The price is pegged with some quality specifications – including moisture content between 8 to 10 percent, free fatty acids between 6 to 8 percent and impurities ranging between 2 to 4 percent.
Although the new price has now been implemented for about two weeks, it is yet to reflect on the ground as opacity in the commodity’s pricing persists. For instance, although a bowl (olonka) of shea nuts is selling between GH¢20 to GH¢25 in the middle belt – Tamale and its environs – the same amount is being sold at GH¢40 in the country’s northernmost parts, Navrongo and Bolgatanga.
This glaring lack of price harmony begs the question of enforcement. What is the TCDA doing in this regard?
Maltiti Enterprise Limited is a local shea butter producer in Tamale with a production capacity of 150 metric tonnes per year. However, the facility’s production has been halted because they are facing challenges sourcing the kernels.
They now produce only on order, as they are unable to source enough shea nuts to stock up for the dry season while maintaining regular shea butter production. Sourcing kernels has become increasingly difficult due to limited capital and the activities of middlemen and multinational companies, which have driven prices up.
Large-scale exporters purchasing raw shea nuts are contributing to the scarcity by colluding with middlemen to inflate prices. Therefore, the fixed pricing system can be detrimental without proper enforcement.
