By Chinyere Anyanwu, [email protected]
Indonesia’s President, Joko Widodo’s plan to ban export of refined, bleached and deodorised (RBD) palm olein from April 28 to deal with the country’s rising domestic cost of edible oil presents an opportunity for Nigeria to bridge the palm oil supply gap in the international market. Unfortunately, several factors are mitigating efforts for the value chain to help the country attain that opportunity.
Nigeria, which was once the world’s largest palm oil producer is today occupying the fifth position in the global palm oil production chart, with 1.5 per cent or 1.03 million metric tonnes of the world’s total output, according to the United States Department of Agriculture (USDA). The country is still unable to meet its own domestic requirements.
The country, according to stakeholders in the oil palm value chain, is a net importer of the commodity, producing only about 50 per cent of what it consumes and importing about $580 million worth of palm oil and its derivatives annually. Nigeria, in the early 1960s, was the world’s largest palm oil producer with a global market share of 43 per cent but now produces just 1.4 million metric tonnes of palm oil, a far cry from Indonesia’s 44.5 million metric tonnes as of 2021. Between 2012 and 2021, Nigeria imported over 4.1 million metric tonnes of palm oil, the USDA data revealed.
Commenting on the country’s inability to provide alternative supply to international buyers of palm oil, the National President, National Palm Produce Association of Nigeria, Alphonsus Inyang, said he does not see the possibility of Nigeria bridging that supply gap any time soon.
Inyang said, “taking advantage of what is happening now globally in oil palm industry is not feasible for our country,” stating that, “it can only serve as a wake up call for us to know that oil palm is a global commodity.”
For his part, Chief Henry Olatujoye, member of the Board of Trustees, National Palm Produce Association of Nigeria and Managing Director, Palmtrade and Commodities Development Ltd, said “Nigeria will not benefit from Indonesia’s lockdown on palm export.”
His reason was based on the fact that since Nigeria’s decline in oil palm production, “we have not done much to increase our forest conversion to plantation, so we cannot export palm oil from Nigeria to any country on economic scale.”
According to Olatujoye, “the only benefit Nigeria will get from this is for the farmers who will sell their palm produce at competitive prices. The price of the commodity will skyrocket in Nigeria because palm oil from Indonesia comes to Nigeria and it will not come in again because of the ban on export of the commodity in Indonesia, so this will create pressure on our production.”
He said the price of the commodity has gone as high as N900,000 per metric tonnes and is expected to still go higher to about N1 million per metric tonne before the end of the year.
On the way forward for the oil palm value chain, both stakeholders are convinced that with government intervention and the right volume of investment ploughed into it, the country can, in the nearest future, take its share of the international palm oil trade.
On this, Inyang stated that the country needs to invest in the planting and development of new oil palm estates without which surprises like the Indonesia ban on oil palm export will keep confronting it.
Among government interventions Inyang suggested is the, “One family, 20 palm trees” programme. He said, “our association, the National Palm Produce Association of Nigeria, has been in the forefront of getting both the states and federal governments to invest heavily in the value chain, especially the state governments that have comparative advantage in oil palm production development, which are 14 in number.
“We have to plan. In planning, our association has a programme tagged, ‘One family, 20 palm trees’. We are inviting government to join us in developing this. Let families plant palm trees; let them plant them as flowers, let them plant them as ornamental trees. They will conserve the environment, they will also create prosperity in the rural and urban communities of the country. So far, on the programme, we haven’t seen any response from either the state or federal government.
“Our association has been pushing for the Central Bank of Nigeria (CBN) to create an intervention programme for oil palm and other tree crops like cocoa, rubber, coffee and maybe coconut, but we have not been able to get any positive response from CBN to create a special intervention window for tree crops, which oil palm is one of them. So we keep pushing for government to make oil palm a national priority commodity.”
Inyang further stated that government needs to, “look at palm oil with the same eye they look at rice and cotton. CBN has been putting a lot of money into cotton production, cowpea, sorghum, soybeans, and rice but up till today we are still importing those commodities. But once you’ve planted a palm tree, you have planted it for life. Flood does not affect it, drought does not affect it. Government has refused to look at that.”
Inyang called on government to partner palm producers association in distributing at least 20 oil palm seedlings to every family in Nigeria to assist in putting palm oil back in its pride of place. He said, “until this is done, situations like Indonesia’s palm oil export ban will continue to take us by surprise. Indonesia produces 12 million hectares of palm oil while Nigeria is still struggling under 700,000 hectares of palm oil.”
Olatujoye noted that for Nigeria to rise in oil palm production and be able to play in the export market, it, “has to do more in forest conversion to plantation so that we can make more money and meet our domestic need.”
Palm oil, the most produced, consumed and traded edible oil in the world is used in thousands of products from food, pharmaceutical industry, to personal care items. It’s production in the country witnessed a major decline as a result of decades of neglect of the value chain in preference for crude oil.