61 years after, Nigeria not among top palm oil producers

In 1961, out of the 1.479 million tonnes of CPO produced across the world, Africa produced 76.5 percent, or 1.13 million tonnes.

Nigeria’s descent from being the largest producer of crude palm oil (CPO) in the world to a net importer seems to have defied all solutions, following the continuous drop in the country’s share in the global production of CPO. With an annual production of 1.4 million metric tonnes (MT), Nigeria’s share of 1.9 percent in the global CPO production pales into insignificance when compared with countries such as Indonesia and Malaysia that control the global CPO market.

Analysis from the data sourced from Our World in Data and the United States Department of Agriculture (USDA) shows that the declining trend began shortly after Independence and got to the climax in 1971 when Malaysia’s production surpassed Nigeria’s, and in 1980 when Indonesia became the second-largest producer of CPO in the world.

In 1961, out of the 1.479 million tonnes of CPO produced across the world, Africa produced 76.5 percent, or 1.13 million tonnes. The same year, Nigeria produced 669,000MT, representing 59.1 percent of Africa’s CPO production and 45.2 percent of the global CPO production. Indonesia and Malaysia only accounted for 9.85 percent and 6.41 percent of the global CPO production in 1961.

Sixty-one years after, specifically as of 2018, the reverse was the case. Indonesia accounted for 56.8 percent of the global CPO production; Malaysia, 27.3 percent; Africa, 3.6 percent, while Nigeria only produced just 1.5 percent of the CPO consumed globally.

At a compounded annual growth rate of 6 percent, the global palm oil market, according to CISION PR Newswire, is expected to increase to $92.3 billion in 2026 from $74.9 billion in 2022. Industry stakeholders say that the increasing size of the global CPO market has established that the problem with Nigeria’s palm oil production is not that there is no demand for the product, but rather its inability to position the industry as a major revenue earner, denying it of the much-needed foreign exchanges.

“If Nigeria had maintained its market dominance in the palm oil industry, the country would have been earning approximately $20 billion annually from cultivation and processing of palm oil as at today”, PwC Nigeria said in its 2019 report, titled ‘X-raying the Nigerian palm oil sector’.

According to a stakeholder, Nigeria’s descent into a net importer of CPO was caused by a number of factors, of which the preeminent ones are Nigeria’s Civil War, oil boom, and lack of government support for smallholder farmers.

Fidelis Olise, corporate communications, Okomu Oil, said: “With the discovery of crude oil in commercial quantity in 1959 and the emergence of crude oil as the dominant source of revenue for the government, government attention was focused on the petroleum industry at the detriment of other sectors such as the agricultural sector.

“The consequence of this was that there was no new investment in the palm oil sector, and even existing oil palm plantations were not given the necessary financial support.”

According to him, the oil palm sector requires a lot of financial capital to be effectively managed and in the absence of the needed funding, the existing plantations were producing less than their projected yields.

Olise said: “The ban of export of crude oil by Indonesia does not necessarily create opportunities for companies like us. I say this because, before the ban, we have always sold all our palm oil products. However, the ban and the contingent increase in the price of CPO may attract new investors into the palm oil sector, but then, investment in this sector will take up to six years to recoup.