• Friday, March 29, 2024
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BusinessDay

PZ, Okomu, Presco need more than cheap funds, inputs to survive

palm oil

Palm oil makers, including PZ Wilmar,  Okomu Oil Palm Company, Presco Plc and other players in the industry, need more than money and inputs to stay afloat.

Last week, the Central Bank of Nigeria (CBN) held a meeting with governors of Abia, Akwa Ibom and Edo, as well as with chief executives of major firms on how to move the neglected industry forward.

Godwin Emefiele, CBN governor, promised to provide funds at not more than nine percent per annum to identified core borrowers.

He also said as part of the apex bank’s Anchor Borrowers Programme and its Commercial Agriculture Credit Scheme, the bank would work with large corporate stakeholders and smallholder farmers to ensure availability of quality seeds for this year’s planting season and agro-chemicals in order to improve cultivation of palm oil.

A chief executive of a palm oil milling plant commended the CBN for recognising the importance of the crop, which he claimed contributed more to the economy than rice.

Onyekachi Oguchi, a small-scale palm oil miller in Umuagwo, Imo State, said it was a sigh of relief for players in the value chain, adding that such funding would help them have more plantations and expand their mills.

However, the big elephant in the room is smuggling of cheap and substandard palm oil into Nigeria through Kano, say players.

Market watchers say this is not within the CBN’s purview, but the Customs, the police and Ministry of Industry, Trade and Investment.

“CBN may do its part, but the biggest challenge is the market,” Ike Ibeabuchi, managing director of MD Services Limited, a services and chemical manufacturing outfit, said. “If you give me money and seeds and I produce without selling, I may struggle to pay you back,” he added, urging the authorities to protect the borders and save the industry.

In an earlier interview, Santosh Pillai, managing director, PZ Wilmar, had said that Nigerian supermarkets and  traditional markets sold huge chunks of imported oil banned in the country.

“The current policies are only aiding cross-border trade and smuggling.  The leading domestic refineries in Nigeria are facing a crisis and many in the country are not operational,” he said.

International data show that palm oil worth 400,000 tonnes per annum are smuggled into the country annually.

Romanus Oguegbu, managing director of a palm oil mill in Uburu, a community in Imo State, said, “Many of my customers are buying smuggled products, which are cheaper but have health implications.”

ODINAKA ANUDU