Nigeria’s palm oil imports from Malaysia dips 20% in 5 months
Nigeria has seen its palm oil imports from Malaysia declined by 20 percent between January and May 2018, owing to the high stock of crude palm oil (CPO) available at local refineries in the country, the Malaysian Palm Oil Council (MPOC) says.
Data from the MPOC shows that Nigeria’s export from Malaysia declined from 99, 971 metric tons (MT) in the first five months in 2017 to 79,873MT over the same period in 2018. This shows a 20 percent decrease on a year on year basis.
“Most countries in the West Africa region imported less Malaysian palm oil in the past 2 months this year after substantial buying in the first quarter of 2018.
“This is due to high stock of CPO available at the local refineries after heavy buying earlier in the year but it is expected that they will begin to import more MPO in the third and fourth quarters as the current price makes it attractive to import and re-stock palm oil,” MPOC says.
Nigeria currently produces about 970,000 metric tons of CPO, while local consumption is estimated at 2.7 million tons per annum, indicating an estimated demand-supply gap of over 1.7 million MT.
In terms of production volume, Nigeria is the fifth largest palm oil producer, behind Indonesia with 36 million MT, Malaysia with 21 million MT, Thailand with 2.2 million MT and Colombia with 1.3 million MT, data in the global oil palm industry shows.
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. This has been attributed to the discovery of crude oil, which changed the country’s palm oil narrative of the 60’s.
As a result, the country has resulted to export to meet up with local demand for the product and countries such as Indonesia, Malaysia, Ivory Coast and Ghana accounts for majority of the imports, trade report from the National Bureau of Statistics show.
“My palm oil trees fruited well because the weather conditions have been favourable but the issue has been the market. There is a lot of supply of palm oil in the market and prices have refused to rise since then,” Gabriel Ogar, a palm oil farmer at Okondi Local Government Area, Cross River state told BusinessDay.
“I have about five hectares of palm oil trees waiting to be harvested but because of the unattractive price currently, I do not intend to harvest it. I am looking for a company that would buy from me,” Ogar said.
According to Igwe Uche, national president, Oil Palm Growers Association of Nigeria (OPGAN) in a response to BusinessDay questions there has been increase in the planting of new palm oil trees in recent years which has helped in increasing the country’s palm oil output in recent months.
“With a well-developed palm oil industry, Nigeria has the potential to earn huge foreign exchange from oil palm production,” Uche said.
According to experts, 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.
Foods like noodles, vegetable oil, biscuits, chips, margarines, shortenings, cereals, baked stuff, washing detergents and even cosmetics are made from palm oil.
To protect the country’s palm oil industry and spur the industry growth the government had imposed a 35 percent tariff (10 percent duty and 25 percent levy) on the importation of palm oil into the country.
But despite this, importation of the product has continued on the rise in recent years.
A price of a metric ton of CPO sells for $660 at the international market while a 25 litres goes for N11, 000 at Mile 12 Market in Lagos.
Similarly, a five litre gallon sells for N2,200 and a bottle goes for N567 in Mile 12 Market in Lagos.