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The objective of this study was to establish the supply chains of shea nuts and analyse the profitability of shea based enterprises. Data were collected through interview schedules conducted on 262 respondents chosen from the lists of relevant shea value chain actors in four selected shea producing states in Nigeria. Data were analysed using budgeting technique. Results indicated that the gross margins per ton for shea nuts collection and processing were ₦10,846.15 and ₦43,500.00, respectively. The shea nuts marketing margin per ton within Nigeria was ₦7000.00. The export margins for nuts and for butter were ₦19,500.00 and ₦34,500 per ton, respectively. The returns per each naira invested in shea-based enterprise range from 0.16 to 0.46. Value addition of shea nuts into butter increases the economic value of shea nuts. It was concluded that business of shea collection, processing and marketing were profitable. It was recommended that credit should be made available to private entrepreneurs to invest on shea-based enterprise. Awareness campaign of shea tree planting is necessary for sustainability of shea-based enterprise in Nigeria. Research into reduction of gestation period of shea tree (Vitelleria paradoxa) should be funded.

Key words: Forest product, export commodity, profitability, shea value chain, Nigeria.

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Citation: Tiamiyu SA, Adagba MA, Shaahu A (2014). Profitability analysis of shea nuts supply chain in selected states in Nigeria. J. Agric. Crop Res. 2(12): 222-227.