• Wednesday, July 24, 2024
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Nigeria: The paradox of palm oil importation

Naira boosts palm oil profits to 10-year high

The inexcusable irony of Nigeria, an abundantly blessed country with vast natural resources importing the processed products of its raw materials, at exorbitant costs, remains a sad reflection of successive poor leadership, over the decades. As it has played out with crude oil so it has with cocoa beans, coffee, cashew nuts and of course, palm oil.

For instance, it would interest the readers to note that the country which was responsible for about 43% to 60% of the world’s total production of palm oil back in the 1960s currently produces as dismally low as 3.5% globally. In fact, according to the United States Department of Agriculture (USDA), Nigeria stands as the fifth country behind Indonesia ( 50 million mega tons, mmt), Malaysia ( 19mmt), Thailand (3.28 mmt) and Colombia (1.9mmt) and Nigeria (1.4mmt). Also, Nigeria is the largest consumer of palm oil on the African continent but compared with the low level of production it has a deficit of 1.6mmt. That is really unfortunate.

Read also: Nigeria spends $600m annually importing palm oil

The irony plays out further as Nigeria’s importation of palm oil from Malaysia – the country that we provided the seedlings back in the 1960s- increased by 65.3% from January to September, 2023. That amounted to 234,324 mmt. It rose from 141, 786 mmt. That is according to the Malaysian Palm Oil Council. But what is the way forward out of this painful paradox of importing the processed products of what God has graciously blessed us with and at expensive costs?

As Nigeria currently spends a whopping sum of $600 million on the importation of palm oil per annum, the National President of the National Palm Producers Association of Nigeria (NPPAN) , Alphonsus Inyang has described the situation as an unhealthy development. Such large sum spent on the importation should be injected into the sub-sector if the government gives it the desired attention.

He has therefore, called on the federal government to assist the palm oil producers with seedlings to develop 250,000 hectares per year. And that should be done through the National Oil Pam Strategy Development Plan. As he noted:” The government does not need to give or develop land for us. We need seedlings, fertilizer, and logistics to close the gap between amount of local production and consumption within four year”. That is aptly stated.

It would be recalled that to boost local production the federal government imposed a 35% levy which includes 10% Duty and 25% levy. But that move has not stopped the importation of palm oil into the country. Local production output is estimated at between 900,000 mmt and 1.3 mmt while the importation is estimated at over N500bn annually. With the national demand of 2.1mmt the supply gap stands at 800 mmt.

What is urgently needed is the provision of hybrid seedlings that are early maturing, disease – resistant with bumper harvest, to the farmers across the 28 states that are actively engaged in its production.

It is important to note that 80 % of palm oil is used for human consumption. It comes as margarine, vegetable fat, food oil, cooking oil, and specialist fat. The derivatives are for industrial use as fatty acids, siaps, cosmetics, inks and resins.

Read also: Oil palm producers caution against foreign involvement in primary production

On the immense benefits for human nutrition, palm oil is rich in Vitamin A for good eyesight. It also fights cancer,brain disease, aging, treating malaria, high blood cholesterol and High Blood Pressure,HBP. Additionally, it is effective against cyanide poisoning, assists in weight loss as well as increasing body metabolism.

With all these important uses for human consumption and industrial uses, perhaps a state of emergency should be declared on the improvement for local production. But a sustainable synergy is needed amongst the Ministries of Agriculture, Science and Technology, Labour and Job Creation.

A workable master plan is therefore, required on what should be done in terms of increased productivity, processing, preservation and of course, marketing/exportation in the next 5 years, 10 years and 20 years ahead. That is how countries such as Malaysia and Indonesia, which we supplied the seedlings have done, with the application of modern technology to rake in billions and lead the world in palm oil revolution. Doing so will solve the paradox of palm oil importation of a country God has richly endowed with the raw materials.