On a year on year basis, Nigeria’s crude palm oil import from Malaysia declined by 1.8 percent to 246, 909MT recorded in 2017.
Similarly, to protect the country’s palm oil industry and spur the industry growth, the Nigerian government had imported a 35 percent tariff (10 percent duty and 25 percent levy) on palm oil imports into the country.
Crude palm oil is also listed on the Federal Government 41 items restricted from forex access.
Some industry experts who spoke to BusinessDay stated that the country’s crude palm oil is less competitive to the imported ones owing to the high cost of production, infrastructural gaps, and high logistic cost among others.
According to them, this makes local manufacturers who use CPO as raw materials for production result to importing the product than patronising local producers.
“Since the inclusion of CPO in the country’s import prohibition list, Nigeria has significantly increase its production in the last 10 years,” Fatai Afolabi, executive secretary, POFON said in a statement last year.
“But Nigeria is still importing a lot of CPO into the country and much more is smuggled through the land borders into the country,” Afolabi said.
Oil palm has the capacity to produce more oil than any other oilseed crop. About 90 percent of palm oil is used in the production of foods, while the remaining 10 percent is used by the non-foods industry, industry players say.
Foods like noodles, vegetable oil, biscuits, chips, margarines, shortenings, cereals, baked stuff, washing detergents and even cosmetics are made from palm oil.
Presco Plc, Nigeria’s biggest palm oil producers is yet to release its 2018 full year financial report, but its already released nine months financial statement shows that revenue dipped on surge in crude palm oil imports and weaker prices as well as consumer demand.
Presco reported a decline in revenue of N16.2 billion for the period ended 30th September, 2018 from N16.9 billion over the same period in 2017, representing a four percent decrease, data from the companies nine month financial statement states.
Similarly, profit after tax declined marginally from N5.3 billion in nine months of 2017 to N5.2 billion over the same period in 2018.
Also, Okomu, Nigeria’s second largest oil palm producer posted a revenue contraction of 8.9percent to N3.75 billion largely driven by the free fall of global Crude Palm Oil (CPO) prices.
Globally, the prices of crude palm oil has been weak with Globally, the prices of crude palm oil has been weak and has falling by 17 percent when compared to prices in January 2017, according to data from Indexmundi.
Since losing its position as one of the world’s largest palm oil producers, Nigeria is yet to recover and take its proper place in the comity of crude palm oil producing nations owing to the discovery of oil, which changed the country’s palm oil narrative of the 60’s.
As a result, Indonesia and Malaysia have now surpassed Nigeria’s production becoming the global leaders in oil palm production.
Henry Olatujoye, president, National President, National Palm Produce Association of Nigeria (NPPAN), stated that the inability of government to provide a reliable data for the industry has remained a major problem for the industry, saying that some foreign investor are taking the advantage to deceive the government in allowing the importation of the produce into the country.
Some experts attribute the increase in imports to the high population growth rate in the country that is fuelling demand.