Business

Palm oil import threatens FG’s 7.7mt production target

…gulps N275.4bn in 2 years

GROWTH

Government has embarked on expansion of palm plantation

 

More palm oil imports into the country is threatening the Federal Government’s target to make Nigeria net exporter of the commodity by 2028. The Central Bank of Nigeria (CBN) had disbursed a total sum of N45.03 billion to stakeholders in the oil palm industry, including the major producers, small and medium enterprises (SMEs) and small holders’ operators, to cultivate about 31, 442 hectares to grow oil palm trees.

The bank noted that the ultimate objective of its intervention in the oil palm sector was to overtake Thailand and Colombia and to become the third-largest producer by 2028 through the cultivation of 350,000 hectares. The plan is also to raise domestic output of 1.1 million tonnes by 700 per cent or 7.7 million by 2027 as the price moves up by 34.7 per cent from $752 to $1,152.33 per tonne in June, 2022 in Malaysia.

However, findings revealed that between 2020 and 2021, the country has imported N275.4 billion ($458.95 million) of the produce when domestic production was just 1.4 million as at 2021. In the first quarter of 2021, the National Bureau of Statistics (NBS) revealed that the country imported N68.2 billion of palm oil from China and Malaysia, while total imports from three countries stood at $118 million.

China led with $49 million, Malaysia, $40 million and Indian, $29 million. Also, in 2020, imports from Malaysia were $242 million, Singapore, $50.8 million; Indonesia, $44.4 million and Colombia, $3.75 million. This year, a trade portal, Index Mundi, explained that importers had booked for 475,000 tonnes of the produce from Malaysia, Singapore and other destinations to meet part of the 1.2 million tonnes deficit.

Last week, Nigerian Ports Authority (NPA)’s shipping data revealed that BDP Spirit has arrived the Apapa Bulk Terminal Limited (ABTL), Lagos Port Complex, with 4,000 tonnes of the commodity. Nigeria’s oil palm consumption in 2015 was 2.5 million tonnes; 2016, 2.5 million tonnes; 2017, 2.5 million tonnes; 2018, 2.5 million; 2019, 2.6 million tonnes and 2020, 2.6 million tonnes.

Between 2020 and 2021production climbed to 1.2 million metric tonnes and 1.4 million metric tonnes respectively. It would be recalled that CBN, Zenith Bank and Sun Trust Bank, among other investors, last month, vowed to develop a 1,590-hectare oil palm plantation operated by Raedial Farms Limited. It was revealed that investors were taking advantage of the Edo State Oil Palm Programme (ESOPP) to deepen imprints in the country’s oil palm sector. Edo has about 120,000 hectares of oil palm plantation under development.

The statement revealed that other investors and stakeholders who visited the Raedial Farms fa- cility in Iguomokhua village, Orhionmwon Local Government Area of Edo State included Boston Advisory, CAGL Global, United Capital and United Bank of Africa (UBA).

They were received by the Managing Director and Chief Executive Officer of the company, Mr. Uwadiale Agenmonmen. Agenmonmen explained work was in top gear to supply crude palm oil and palm kernel oil (PKO) to the market through the current expansion programme of its palm plantation and mill. He stated that there was no better time to invest in palm oil cultivation and production in Nigeria other than now, particularly against the backdrop of the recent ban on the exportation of palm oil and oil palm produced by the Indonesian Government.

 

He said: “There may be ups and downs but lately, the palm oil value chain has been the best in a while, fostered by Indonesia shutting down their export recently and thereby putting the pressure back home.

 

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