Ghana ranks among the leading global producers and exporters of shea butter, annually exporting approximately 38,792 metric tons. It is known for producing some of the finest quality shea butter, which commands premium prices on the international market. The shea value chain in Ghana is well-organized and predominantly women-led, contributing significantly to the country's economy.
Nonetheless, in the past two years, and especially in 2024, the shea industry in Ghana has encountered significant challenges, jeopardizing the country's status as a leading producer of shea butter. The substantial rise in prices and the scarcity of shea nuts have exerted considerable pressure on the industry. The 2024 shea season yielded 45% less than projected. Despite the deficit, the government permitted exporters to ship nearly half of the available shea nuts, leaving shea butter producers stranded.
Additionally, Ghana's government apathy to restrict the export of the shea nuts, the ban from Burkina Faso, and the inability to compete with foreign buyers have exacerbated the situation.
Between 2023 and the first half of 2024, Ghana experienced a 140% increase in the price of a 100kg bag of shea nuts. Consequently, the ex-factory price for a kilo of shea butter surged to over $4.00. This dramatic price hike led many clients to suspend their sales contracts with Ghanaian shea butter producers, forcing numerous artisanal producers out of business by the latter part of 2024. Companies such as Organic Trade and Investments (OTI) were forced to reduce their monthly shea butter production by over 60% of their standard capacity.
The revenue loss was significant. Although precise figures are unavailable, it is estimated that Ghana may have experienced a revenue decline of over 40% in shea butter. This downturn has left many women shea butter producers financially at risk and in an unstable economic situation.
Ghana is at risk of losing its market share to other shea butter-producing countries like Nigeria, especially if the current challenges persist.
Amid the crisis, shea processing organizations petitioned for improved regulation on shea nut exports to address the challenges of shea nut shortages. The government at the time did little to nothing to address the issue.
Furthermore, there are initiatives and support programs aimed at improving the situation, such as the Ghana Shea Landscape Emission Reductions Project (GLSERP) and various sustainability efforts. Shea butter producers believe that with the right support and policies, there's hope for recovery and growth in the future.
Meanwhile, numerous producers of handcrafted shea butter have paused production until the new shea nut season, anticipating that the 2025 harvest will exceed that of the previous year and that shea butter prices will be adjusted downward to win back their international clients.
It's a tough situation, but with the right support and policies, there's hope for recovery and growth in the future.
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