When you hear the word Agricultural commodity trader, what comes to mind? Do you think of it as the modern name for the woman who sells tomatoes at Ketu Market, Lagos or the man who sells yams at Baki Biam Yam market in Benue state? While agricultural commodity brokerage involves the buying and selling of farm produce, it is far more complex than just buying and selling.
In this article, you will learn what an agricultural commodity trading business is, who your clients are and how to start this business in Nigeria.
Table of Contents
What is Agricultural Commodity Trading Business?
Agricultural commodity trading business is a business where you source for farm produce in bulk from farmers and sell to other businesses who also buy in large quantities. In this business, you act as the middleman between big organizations and farmers.
Now, you might be wondering why these big organizations do not just buy directly from farmers. If you did wonder, that is a valid question.
You see, running a successful business involves a lot of processes and large companies do not mind paying a part of their revenue to outsource some of these processes to other businesses that can handle them properly.
Take agricultural commodity trading as an example, most times, commodity traders need to source for farm produce from multiple farmers, make sure it is the correct species of crop, store these items and handle logistics. A commodity trader that stores farm produce could even lose money in the process because the price of the commodity might fall below the price he paid for it.
This is a lot of work, some risks are involved and companies will be glad to have the commodity trader handle the work and pay a premium for it.
Difference Between an Agricultural Commodity Trader and a Retailer
You now know the role of an agricultural commodity trader, but who exactly is a retailer?
A retailer is a business person or company who sells to individuals for consumption. They are the market men and women in open markets, the neighbourhood grocery stores or bigger outlets like Market Square and Shoprite. Their primary focus is on end-users, households and consumers who buy to eat, not to resell.
If both businesses involve the buying and selling of farm produce, then what really makes them different?
Another valid question. The main differences lie in scale and target customers. Commodity traders usually deal in bulk quantities, connecting farmers to processors, exporters, or large buyers, while retailers break goods down into smaller portions for individual consumers.
Here is a table that shows the key differences between the two:
| Category | Agricultural Commodity Trader | Retailer |
|---|---|---|
| Target Market | Companies, processors, wholesalers, exporters, bulk buyers | Individual consumers and households |
| Quantity of Purchase | Buys and sells in large quantities (tons, truckloads, containers) | Buys in moderate/small quantities, sells in pieces or small packs |
| Role in Supply Chain | Middleman between farmers and large-scale buyers | Final link in the chain, selling to the end consumer |
| Capital Requirement | Usually higher, as bulk purchases and logistics are involved | Lower, since stock can be purchased in smaller amounts |
| Focus | Trade efficiency, bulk sales, storage, and sometimes exports | Customer service, convenience, and accessibility |
Why Start an Agricultural Commodity Trading Business?
Value chain gaps
A lot of farmers in Nigeria do not have access to storage facilities where they can store their harvested goods and prevent it from spoiling or losing value, hence, they need to sell quickly. Most people that buy from them are traders or small businesses who buy in small quantities.
If farmers are certain that there is a market for every harvest, they will be encouraged to produce more, thereby enriching themselves, other stakeholders and making the Nigerian economy more stable.
High local demand
There is a high demand for farm produce in Nigeria, either for consumption or for industrial use as raw materials in food processing, beverages, animal feed or other agro-allied industries. Take Cassava which Nigeria is a major producer of as an example. Cassava is not only consumed directly as garri, fufu, and other staples, but it is also an important raw material for producing flour, starch, and ethanol. The wide range of uses ensures that demand for cassava remains consistently high across both households and industries.
Apart from Cassava, there are other agricultural commodities with a high local demand in Nigeria. Some of the most notable are; Maize, Cocoa, Soybeans, Cashew, Groundnut, Rice.
Export opportunities
If there are hundreds of companies in Nigeria that need agricultural raw materials for production, then, there are thousands of companies abroad that require the same commodities in even larger volumes. The global demand for crops such as cocoa, cashew nuts, sesame seeds, ginger, hibiscus, and soybeans is steadily rising, and Nigeria is among the top producers of many of these commodities.
Beyond demand, exports gives traders the opportunity to earn in foreign currencies such as dollars, euros, and yuan, which are far more stable than the Nigerian naira. This creates a hedge against inflation and currency devaluation, ensuring that businesses remain profitable even when local markets are unstable.
Moreover, international buyers often pay premium prices for quality produce, especially when it meets global standards of packaging and certification. This gives Nigerian commodity traders who can ensure quality control a competitive advantage in the export market.
Another important factor is that global food security concerns are pushing many countries to diversify their import sources. With Nigeria’s fertile land and large farming population, Nigeria is well-positioned to become a major global supplier of agricultural commodities, provided that trading businesses bridge the gap between farmers and foreign buyers.
How to start an Agricultural Commodity Business in Nigeria?
Choose your Niche (types of crops)
One mistake to avoid when starting an agricultural commodity trading business is to spread yourself too thin by trying to trade in too many crops at once. It is better to start by focusing on a few commodities that you understand well, build reliable supply chains around them, and then scale gradually into other crops as your business grows.
When choosing your niche, consider factors such as demand (local and international), ease of storage, profitability, and availability of supply. For instance, crops like maize, rice, and soybeans have massive local demand from households and industries, while commodities like sesame seeds, cocoa, and cashew have strong export markets that bring in foreign exchange. Aligning your niche with market demand ensures steady cash flow.
Another important factor is logistics and preservation. Some crops, like tomatoes and fruits, are perishable and require cold chain storage or quick turnover, while others like grains, ginger, or dried hibiscus flowers can be stored for longer periods with minimal losses. As a beginner, it is often wiser to start with crops that are less perishable to reduce risks.
It is also advisable to consider your network and location. If you already have access to farmers who grow a particular crop in large volumes, that may be the best place to start. Similarly, if you have potential buyers in a certain industry (e.g., breweries, oil mills, or exporters), you can tailor your niche around their needs.
Connect with farmers
After choosing the crops you want to trade, the next step is to connect with farmers who cultivate those crops in reasonable quantities. Farmers are the foundation of the commodity trading business because they provide the raw materials you will supply to processors, wholesalers or retailers. Building strong and reliable relationships with them ensures a steady supply.
One effective way to connect with farmers is through cooperative societies and associations. These groups bring farmers together, making it easier for traders to buy in bulk and negotiate better prices. They also reduce the stress of dealing with many individual farmers.
Another approach is to visit farming communities directly. Many farmers, especially in rural areas, prefer face-to-face relationships with traders they can trust. By showing up in person, you build credibility and gain access to firsthand information about planting seasons and harvest timelines.
Select your Logistic partners
When you receive an order, how do you plan to move the commodities from your storage location to the buyer? That is where logistics comes in. It is best to identify and secure reliable logistics partners before orders begin to come in, so as to avoid delays and ensure smooth delivery.
In the agricultural commodity trading business, logistics is a critical success factor. Poor handling or late delivery can lead to spoilage, customer dissatisfaction, and financial losses. That is why selecting trusted logistic providers who understand how to transport farm produce is key. Depending on your niche, this could range from small trucks and vans for local deliveries, to larger haulage companies for inter-state supply, or export shipping agents for international buyers.
When choosing logistic partners, consider factors like cost, reliability, capacity, and speed. For example, if you are trading perishable goods such as tomatoes, vegetables, or fruits, you may need transporters with refrigerated trucks or at least fast turnaround times. On the other hand, if you are handling grains, cassava, or sesame seeds, your focus will be on bulk capacity, secure packaging, and protection from rain or pests during transit.
It is also wise to develop relationships with more than one logistics provider. Relying on a single transporter may put your business at risk if they face breakdowns. Having backup options prevents avoidable delays.
For exporters, logistics becomes even more complex. You will need to work with freight forwarders, clearing agents, and shipping companies who are familiar with customs documentation, export regulations, and international trade requirements. Partnering with professionals in this space prevents costly mistakes.
Register your business
In this business, you will be doing transactions with other companies; big companies do not deal with individuals. Also, running a business in Nigeria without registering it with the corporate affairs commission (CAC) is illegal.
To register your agricultural commodity business, you first need to come up with a name. You can use our business name generator tool to generate a name for your business.
Once you have gotten a name you like, you can proceed with the registration.
Get a business bank account
One of the benefits of registering your business is that you can open a bank account in your business name. Having a business bank account shows that you are serious about your operations and separates your personal finance from your business finance.
Having a business account early in your business and taking your business financial records seriously makes it easier for you to access loans in the future.
If you do not know which bank to go with, you can read our article on how to choose a bank for your business.
Reach out to potential clients
You have access to the farmers, your business is registered and your bank account is ready, it is time to start reaching out to potential clients who might be interested in your commodity.
Start by researching for businesses that will require your product on Google search or AI chatbots like Gemini or Chatgpt. Armed with a list of companies, you can search for the procurement manager of the company on LinkedIn and reach out to them.
You can also visit their websites and fill out the contact form introducing yourself and your business.
Build Trust using Content
When you start this business, nobody knows you or your company. It could be hard for other companies to trust you right away.
In fact, when you send them an email, they may do a Google search to find out more about you. When they search, what information do they see about your business?
That is where content comes in.
Content makes it easier to build trust online. You can start with writing content about your business on Facebook or X, create videos and post on YouTube.
Start with whatever platform you are comfortable with, then expand to other platforms as your business grows.
Creating content will also make it easy for businesses who are looking for the agricultural commodity you sell to find you online.
Imagine a procurement officer for a cashew butter company in Oregon, USA, searching Google for where to buy quality cashew in Africa. If they find your website, Youtube videos, or articles about cashew sourcing that you have published, it immediately gives you credibility and positions you as a reliable supplier.
Follow the News
The price of agricultural commodities are affected by geopolitics, government policies, weather conditions, global market trends, and even local events such as strikes or insecurity in farming regions. For a commodity trader, staying informed is not optional, it is a survival strategy.
For example, international events such as wars, trade sanctions, or shipping disruptions can raise or lower global demand for certain commodities. A ban on exports from one country may create sudden opportunities for suppliers from Nigeria. Similarly, changes in exchange rates or global inflation can affect how much foreign buyers are willing to pay.
At the local level, government policies like import bans, new tariffs, fertilizer subsidies, or border closures can immediately impact commodity prices. Traders who follow these developments closely can adjust their buying and selling strategies to maximize profits and avoid losses.
Following the news helps you anticipate market changes instead of reacting to them. It allows you to buy when prices are low, sell when they are high, and always stay one step ahead in the agricultural commodity trading business.
🚀 Take Action Today
If you are serious about starting an agricultural commodity trading business in Nigeria, the first step is to position yourself as a credible player in the industry. And that begins with registering your business. Big buyers, processors, and exporters want to work with trusted and legitimate companies, not individuals.
By registering your business with the Corporate Affairs Commission (CAC), you immediately boost your credibility, open the door to corporate contracts, and qualify for loans, grants, and export opportunities. Don’t wait until you lose a deal because your business isn’t registered.
👉 Take the first step now: register your business, open a corporate bank account, and get ready to build a trading brand that stands out. The agricultural market is full of opportunities, and the earlier you start, the sooner you’ll benefit.
