Business

Nigeria imports N176bn palm oil in 2020

 

 

Despite measures by the government to curtail imports, Nigeria has imported some crude palm oil valued at N176billion ($360million) as deficit soared to 500,000 tonnes in 2020.

 

It was learnt that local production had dwindled from 1.2million tonnes to 1.01million tonnes, while demand stands at 1.5million tonnes.

 

Currently, the price of the produce is $720 per tonnes in the global market.

 

According to the National Palm Produce Association of Nigeria (NPPAN), importation, smuggling and the influx of banned adulterated crude palm oil (CPO) into the country’s market had discouraged local production.

 

The association noted that indigenous companies were losing about $500 million annually, while Malaysian exporters were smiling to their banks.
On the other hand, the Chairman of Malaysian Palm Oil Board (MPOB), Datuk Ahmad Yaakub, said that the increased demand from India, Nigeria, Ghana, Iran, Pakistan and Japan had aided Malaysia’s palm oil exports to rise to 3.8 per cent from 1.67 million tonnes since October 2020.
Worried by the growing export and smuggling, the General Secretary of NNPAN, Iyare Harrison, explained that it was getting difficult to get these lands as residential areas and industries had gradually encroached on available spaces leaving little space for oil palm production.
He explained that majority of land were communally owned, which made it difficult to acquire them on lease.
Harrison added that operators at the processing phase suffered from infrastructural challenges such as poor road networks, epileptic power supply from the national grid, dilapidated oil processing mills which makes milling unsustainable in many cases.
In 2019, the export value of palm oil stood at over $15 billion out which Indonesia amassed $11.01 billion, Malaysia gained $6.57 billion and Nigeria recorded zero dollar from its export.
Already, the Central Bank of Nigeria in one of its assessments of the oil palm industry had explained that the country would have been earning approximately $20 billion annually from processing of palm oil if it had sustained reasonable levels of investment in its production.
It was revealed by the United States Department of Agriculture (USDA) that while Nigeria recorded 1.2 million tonnes or one per cent of annual production to gain recognition as the fifth highest producer in the world, a 2019 analysis revealed that Indonesia produced 42.50 million tonnes of annual oil palm or 58 per cent of global production; Malaysia, which was ranked second, produced 19 million tonnes per annum or 28 per cent of global production; Thailand’ s output as the third producer was 2.8 million tonnes or four per cent; Colombia was in fourth position with 1.53 million tonnes.

 

It would be recalled that in July, 2020, Malaysia introduced a 100 per cent export duty exemption on CPO till December 31, 2020 to woo buyers at a reduced price of $580.50 per metric tonne.

 

According to Malaysian Palm Oil Council (MPOC), Nigeria will import more Malaysian crude palm oil in the next few months to replenish the declining stock and surge in demand in post-Covid-19.

 

Data by Nigerian Ports Authority (NPA)’s shipping position, however, revealed that there had been a surge in the import as MV Philoxenia berthed at the Lagos Port complex with 12, 699 at Apapa Bulk Teminal Limited, while MV Gulf Mishref has been moored to offload 25,000 tonnes at ENL Consortium terminal.

 

Also at Josepdam Terminal, Tincan Island Port, Ardmore Sea Lion offloaded 10,000 tonnes.

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