Million metric tonnes of vegetable oils are consumed daily worldwide in the industrial complexes and households. Vegetable oils encompass crude palm oil, soybean oil, rapeseed oil, sunflower oil, coconut oil, olive oil, peanut oil, palm kernel oil and cottonseed oil. According to Statista, 177 million metric tonnes of vegetable oils were produced in 2016.
While different countries have invested in the production of vegetable oils, especially in areas where they have comparative advantage, palm oil remains the most produced and consumed globally. In 2015/2016 farming season, 34 percent of the vegetable oils produced across the globle was palm oil, and it will take a while for the production of other vegetable oils to overtake it.
From palm oil to cottonseed oil, Nigeria, blessed with different climatic conditions favourable to the production of some of the aforementioned vegetable oils, there is none that we are among the top three producing countries worldwide.
Indonesia, Malaysia and Thailand dominate the palm oil production space. In 2016, Indonesia produced 32 million metric tonnes of CPO, and it achieved that feat ten years after it surpassed Malaysia to emerge as the world’s largest producer of crude palm oil.
United States stands tall as the largest producer of soybean oil with 106.8 million tonnes in annual production, according to 2015/2016 Palm Oil Analytics data. It is followed by the Brazil with 96.5 million tonnes in annual production. The third largest producer in the word is Argentina. In terms of consumption, China, USA and Brazil rank the most on the scale.
European Union, China and Canada dominate the rapeseed oil production. The combined EU output amounts to over 10 million metric tonnes of rapeseed oil annually. China and Canada produce about 7 million and 4 million metric tonnes of the same produce.
Ukraine produces 11.9 million metric tonnes of sunflower oil to be the largest source of that oil in the world. Also, with 10.6 million metric tonnes, the Russian Federation is ranked second in sunflower oil production while the EU bloc occupies the third position.
For cottonseed oil, China and India have no rivals as they are far ahead of others in terms of the quantities of cottonseed oil produced annually. China, with about 1.4 million metric tonnes, has a slight edge over India with 1.3 million metric tonnes annually. Pakistan is third.
It is clear from the above that Nigeria is not in contention for the top three producing countries of vegetable oils worldwide.
One of the major challenges that constrain this nation from being among the top three producers of vegetable oils such as palm oil is accurate data on the producers of crude palm oil. The notable ones which are Okomu, Presco and few other producers may be known, aside those, accurate information on other small holder farmers who account for over 50 percent of the annual CPO is not available. The oil palm belt in Nigeria is found in Abia, Anambra, Bayelsa, Akwa-Ibom, Cross River, Delta, Eboniyi, Ekiti, Enugu, Ondo, Ogun,Osun, Oyo, Imo and Rivers states.
Across all the states in the nation’s palm oil belt, neither the state nor the federal government can give an accurate number of the small holder palm oil farmers. Therefore, it will be difficult to plan and execute programs that will aid production capacity of small holder farmers in the palm oil value chain.
This is not the case in Indonesia and Malaysia where accurate records are kept of those in the palm oil value chain. For instance in 2017, the Indonesian Government planted over 9,000 hectares of plantations in order to boost productivity of the local growers.
“The replanting program is crucial because 470,000 of oil palm plantations in the province are owned by local farmers, 350,000 of which are too old,” Economic Coordinating Minister, Darmin Nasution said in November 2017, according to the Jakarta Post.
“It is a big job to replant the oil palm trees owned by local farmers. There are 4.6 million”, the minister added.
Indonesia could embark on the replanting of the old plantations because there are accurate records on the number of small holder farmers and the size of each of their farms in the crude palm oil producing belts in that country.
Another challenge is the production methods adopted by the small holder farmers which cause over 50 percent of the crude palm oil to be lost during processing. Since most of the small holder farmers don’t have the financial capacity to acquire modern technologies, they rely on local climbers to harvest fresh palm fruits. Unfortunately, as it is general to the agricultural sector, the youths traditionally engaged to do this jobs are no longer interested as most of them prefer to go into the cities in search of greener pastures. Little wonder why Nigeria’s CPO production has remained stagnant for almost two decades whereas other countries have raised the levels of their productivity.
Furthermore, while Kenya, Tanzania, Ghana and other African countries could boast of several million dollars as earnings from the export of vegetables, Nigeria is just starting to look into that sector for maximum benefits. Vegetable farmers in Ogun, Anambra and Kaduna states are taking the lead in this area.
Late 2017, BusinessDay Research and Intelligence Unit (BRIU) attempted to provide more information on the production of vegetable oils and vegetables in Nigeria through a report entitled “Vegetables and vegetable oils export”.
For close to two decades, Nigeria’s palm oil output has remained virtually the same at about 920,000 metric tonnes, even when consumption has surged owing to growth in population and expansion in food processing and soap making industries. Therefore, we are a net importer of CPO. The report shows the leading producers of vegetable oils and vegetables as well as the individual firms driving the growth of the vegetable oils produced in some of the leading countries.
“Europe has seen the consumption of palm oil grow by 7 percent since 2010. This is because the product is used mostly as biofuel. According to Oilworld, 46 percent of palm oil consumption in Europe is used in the production of biodiesel; 45 percent in making food, animal feed and for oleochemical use, while 9 percent is needed to generate heat and electrcity”, the report noted.
As sustainable farming gains momentum, developing countries must embrace sustainability in farming if produce and products from such countries are to be accepted in the European countries which are the major consumers and trading hubs for vegetables and vegetable oils.
“In the United Kingdom, between 72 percent and 93 percent of palm oil that entered the UK received sustainability certification in 2014. In Sweden, 97 percent of imported palm oil got sustainability certification in 2014. In 2015, oil palm imported into Germany and France got 79 percent and 96 percent certification respectively. Denmark, Norway and Italy have also committed to 100 percent CSPO by 2020’, the report stated.
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