Stories by Steve Agbota
Nigeria was the world largest producer of palm oil between 1950s and 1960s. It had a market share of 43 per cent, supplying 645,000 metric tonnes of palm oil, on annual basis consumers across the globe.
Sadly the country fell from being the largest producer of oil palm to net importer of the product. It is not surprising therefore that shortly after the commodity was included among the 41 items banned by the Federal Government from accessing official foreign exchange markets in June 2015, the cost of local palm has risen beyond the reach of many. The ban has increased the demand for the product in the market, while production has not increased.
Nigeria produced 930,000 tonnes of palm oil in 2013 and the forecast for the 2016-2017 season is 970,000 tonnes, making it Africa’s largest producer and the world’s fifth, behind Indonesia, Malaysia, Thailand and Colombia, according to data from the US Department of Agriculture (USDA).
The restriction placed on the commodity to benefit from foreign exchange forced the manufacturers who used to import palm oil to source for the commodity locally, which is part of the reasons the price of palm oil increased significantly and the product becoming scarce across major markets in the country between 2016 and 2017.
Manufacturers, who use the product in the manufacture of ice cream, margarine, cosmetics and confectionaries, among others, are now competing with households for palm oil as they could no longer import palm oil listed among the 41 items restricted from accessing foreign exchange in the local market by the Central Bank of Nigeria (CBN).
Daily Sun learnt that a 25-litre can of palm oil, which sold for N6,500 in January 2016, now sells for between N22,000 and N25,000, an increase of 284 per cent while a bottle of palm oil, which sold for N220 in January 2016, sells for N720, an increase of 227 per cent. The five litre keg of palm oil sold for N1,300 in 2016 now goes for N5,000, an increase of 284 per cent at major markets and supermarkets in the country.
A palm oil trader at the popular Daleko market, Madam Foluke Agboola, who spoke to Daily Sun, said that some months back, the price of the commodity was very high.
She said 25 litres was selling between N22,000 and N25,000 but last week, the price came down a bit to at least N16,000, saying by April, the price will come down to normal but between June and July, which is rainy season, the price will also rise by a certain percentage.
Nigeria produces one million metric tonnes of palm oil per year, with local consumption estimated at 2.7 million metric tonnes which put the demand supply gap at 1.7 metric tonnes per year.
USDA and Vetiva Research stated that Nigeria currently exports 900,000 metric tonnes of palm oil and earning $594.9 million at today’s price of $661 per tonne and this represents 1.5 per cent of the global 58.8 million metric tonnes output.
Ironically, despite being among 41 items banned from accessing official foreign exchange markets in June 2015, Nigeria imported palm oil worth 1000 metric tonnes with the growth rate of 33.33 per cent in 2016, according to IndexMundi, a data portal that gathers facts and statistics from multiple sources and turns commercial use.
Since Nigeria could still import 1000 metric tonnes of palm oil in 2016, being among the 41 items banned from forex market, it is obvious there is loophole in the Federal Government policy.
Speaking to Daily Sun, National President of Palm Produce Association of Nigeria, Olatujoye Henry, said, “the price of palm oil has started going down and there is a lot of demand and supply. The government policy that removed palm oil from the list of commodities that will benefit from foreign exchange has really helped because there is no importation and there is now dependence on domestic production.”
He advised government to encourage investment in palm plantation development, saying there was urgent need for government to provide enabling environment in terms of soft loans, guarantee for equipment for processing to come into the country with less duty on them.
According to him, government should also encourage backward integration of palm plantation in the country.
On the challenges facing the association, he said: “The challenges facing the association are the normal challenges. Everybody is begging the government for assistance, which is not supposed to be. One of the challenges facing our association is funding. We don’t have the capacity to move the association forward in terms of funds. To meet domestic and international demand in palm oil, government must play its role by assisting us and providing other incentives.”
Meanwhile, the Deputy Managing Director of Peniel Gera International Limited, a seed company, Ojiefoh Enahoro Martins, who is also a palm oil farmer in Delta State, said the major problem with palm oil in Nigeria is lack of improved varieties.
Now that government’s policy has prevented the commodity from accessing foreign exchange, he said if drastic actions and steps are not taken, by 2020 Nigeria would start importation of palm oil.
He lamented that the Nigerian Institute for Oil Palm Research (NIFOR) that was supposed to serve as a reference centre has been politicised, stressing that the yield of palm oil in Nigeria is low compared to other producing countries like Malaysia and Indonesia.
He added: “We remember vividly that the Malaysian government took seedlings from us and improved it and today they are a major exporter of palm oil in the world. For us to be among the major palm producing countries, our local seeds need to be improved. Government, over the years, has not shown concern for oil seed products; not only palm but majorly oil seeds products.
“The local fabricating machine for extracting oil has less capacity and imported foreign machines are always expensive for local farmers. We purchase local machines from Agbor, Delta State, to substitute for imported machines. Oil seeds products are crucial to over 98 per cent of Nigerians and it is too important to ignore.”
Before now, he said Nigeria played a vital role in palm oil production and its quality was the best. But since early 90s the reverse has been the case and the country is facing dwindling production.
To revive the sector, he stated that improved seedlings and palm estate projects for communities by government have to be introduced across the major palm oil producing states, including Cross River, Edo, Delta, Ondo, Oyo, Ogun, Osun, Ebonyi, Imo, Abia and Kogi states.
30,000 farmers benefit from FG’s dry season farming initiative
Thirty thousand farmers in Niger have benefited from the Federal Government’s Growth Enhancement Support (GES) initiative targeted at boosting dry season farming, an official has said.
Dr. Bello Salihu, Niger State Director, Federal Ministry of Agriculture and Rural Development, told the News Agency of Nigeria (NAN) in Minna, at the weekend that the scheme started on Dec. 22, 2016.
“We started dry season farming in Niger State on Dec. 22, 2016; so far, we have given inputs to 30,000 farmers,” he said. Salihu said that each farmer received a bag of urea variant of fertiliser, two bags of MPK fertiliser, and one bag of organic fertiliser. They also received two litres of micro-nutrients and a bag of improved seed,” he said. He said that government paid 50 per cent of the cost of the inputs, valued at N18,675. while the farmers paid the balance.
“We also gave them improved seeds with government paying 75 per cent of the cost, while the farmers paid the balance of 25 per cent,” he said. He said that the redemption process was through the electronic e-wallet device, which uses internet facility to reach out to the farmers.
Salihu explained that the process involved sending text messages to registered farmers that were uploaded on the platform.
According to him, the project targets 40,000 farmers for the 2016/2017 dry season farming in the state.
“We targeted 40,000 and have reached 30,000. The target will be met before the end of the farming season,” he said.
Meanwhile, The Federal University, Dutse in Jigawa, said on Thursday its local tea production programme in Raju community of Dutse Local Government area would provide economic succour to no fewer than 12,000 members of the host communiy. The Vice Chancellor of the University, Prof Fatima Mukhtar, disclosed this at a Pre- Convocation Press Conference in Dutse.
Mukhtar explained that the school’s Centre for Enterprenureship Development went into a research and discovered a local product known as ‘Dinya’ in Raju community in Dutse local government area of the state.
According to her, the local product will be used in producing local tea, something that is capable taking the people of the community out of poverty.
“It is a local product, Dinya, that had been developed into highly marketable modern tea and coffee.
“The research by our scholars had indicated that the tea is highly medicinal and nutritious, and we are going to raise another research team for more findings on the tea,”she said.
Mukhtar said that very soon, the university would convey an economic summit to market the tea, as well as other confectioneries being produced in the school.
The Vice Chancellor also announced that 18 students would be graduating with First Class and 139 with Second Class Upper Divisions during the second convocation ceremony on Saturday.
Agrihub to train 50,000 farmers by 2025
With the dwindling value of the naira and current inflation rate at 18 per cent, there is a need for the diversification of the economy to create additional source of income for individuals.
To this end, Agrihub Nigeria, in collaboration with Eweko Concept and Epe Agribusiness Cluster, will be running a 12 weeks comprehensive programme to train new entrants into the agriculture space from February18, 2016.
The training is aimed at producing a new generation of tech-savvy farmers with modern techniques in farming to scale up productivity levels, build entrepreneurial skills and create sustainable agri-business that will generate employment ultimately reducing current prices of food.
While commenting, the CEO of Agrihub, Ronke Aderinoye, said “the vision of Agrihub is to train 50,000 new generation farmers by 2025, which will in turn create employment and crash the prices of food items. All participants can be sure that at the end of the programme, they will have acquired the necessary skills to be successful farmers.
“Unfortunately, we can only take a limited number for the first stream of the training. Interested participants will be taken on a first-come, first-served basis, as there are limited slots available. The training is basically in two phases; the Executive Farmers Incubators Programme (EFIP) and Young Farmers Incubators Programme (YFIP).
The EFIP is a paid programme for individuals who wish to own a farm but not run it full time. The classes will be held only on Saturdays for 12 weeks. Trainees will have access to a mini-plot, supply of farm produce and access to a network of experienced farmers.
The programme will focus on planting operations, business planning, farm planning, financials and opportunities available across the agricultural value chain.
YFIP is a free 12-week programme for individuals who wish to go into farming full time. Trainees will be resident at site with 2 days off per week and will learn both technical and non-technical skills like the executive.
The curriculum for both programmes covers produce cultivation from pre-planting to harvesting. Transportation is available at an additional cost. The programme site is in Epe, Lagos State.
The first stream commences February 18, 2017. Agrihub will also be available to support trainees in setting up their own farms after the course.