Palm Oil Import Swallows N28.16B in 6 Months Despite Forex Restrictions – THEWILL NEWS MEDIA | Jewelry Dukan


Nigeria imported N28.16 billion in palm oil in the first six months of 2022 as the value of agricultural commodities shipped to the country maintained an upward trend. Palm oil falls under country’s foreign exchange restrictions; It is among the 41 import items banned for foreign exchange trading by the Central Bank of Nigeria (CBN). This means that importers have to source their foreign exchange through alternative routes such as the parallel market.

Data from the National Bureau of Statistics (NBS) in its “Foreign Trade in Goods Statistics Report” for the second quarter of the year (Q2 2022) showed that the figure represented a 5.2 percent increase over the corresponding period in 2021 , which recorded a value of N26.77 billion.

The report, published on the official website of the National Bureau of Statistics, also showed that palm oil imports were N14.64 billion in the second quarter of 2022 compared to N13.52 billion in the previous quarter, an increase of 8.3 percent. The commodity classified as “Crude Palm Oil” was mainly imported from West Africa and Asia.

The country shipped N14.64 billion worth of palm oil from Ivory Coast in Q2 2022, while Malaysia and China shipped N13.50 billion and N0.02 billion of the commodity, respectively, in Q1 2022. In Q2 2021, Africa’s largest economy imported N$15.09 billion palm oil from Singapore and N$11.68 billion from India, for a total of N$26.77 billion.

The NBS report further showed that Nigeria’s import of agricultural commodities accelerated over the periods – jumping from N1.094 trillion in HY 2021 to N1.105 trillion in HY 2022, a 10 percent increase. Excluding palm oil, Nigeria imported wheat worth a total of N131.54 billion in the second quarter of 2022 compared to N130.60 billion in the first quarter of 2022.

Wheat imports in the second quarter of 2022 included N70.67 billion and N60.87 billion from the US and Lithuania, respectively. The N130.6 billion in Q1 2022 was made up of N71.56 billion from the US and N59.04 billion from Argentina as Nigeria sought alternative sources to Russia and Ukraine (its traditional suppliers). , who have been engaged in a serious war since February , 2022.

Wheat shipments in the second quarter of 2021 totaling N218 billion came mainly from the United States, Canada, Argentina and Lithuania. Frozen food (blue whiting) was imported from Russia and the Netherlands in the second quarter of 2022, amounting to N13.39 billion and N7.31 billion, respectively.

“The total imports of agricultural goods imported in the second quarter of 2022 amounted to N454.45 billion, or 8.55 percent of the total imports in the second quarter of 2022. This shows an increase of 4.76 percent compared to that in the first quarter value recorded in 2022 (N443.36 billion). ) and increased by 13.70 percent compared to the value recorded in the second quarter of 2021 (N408.49 billion),” the NBS said in its report.

Palm oil is a highly sought-after commodity among manufacturing and processing companies, who use it as a raw material in the manufacture of various consumer and industrial goods.

The CEO of the Center for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf said the palm oil produced in Nigeria was grossly inadequate, adding that users would pay any amount to import the commodity if it boosted their margins. “When products are expensive, manufacturers can benefit because they adjust their prices to maximize their profits,” Yusuf, immediately former general manager of the Lagos Chamber of Commerce and Industry (LCCI), said in a phone conversation with THEWILL.

Emmanuel Ebong, who runs a medium-sized palm oil processing company, said the NBS figures do not reflect the true value of the goods being shipped into the country. “A large amount of palm oil is smuggled across borders, particularly from Cameroon and the Republic of Benin. It is huge business among the barge companies that operate between Nigeria and neighboring countries. They are the actual suppliers to the big manufacturing companies that use the raw material.”

Deputy Director of the Department of Agriculture at the Ministry of Agriculture and Rural Development, Benard Okata, said Nigeria spends about US$500 million annually on importing oil palm to fill existing gaps in the sector.

Okata, who made the remark at the national oil palm workshop organized by Solidaridad, an international non-governmental organization, in November 2020 in Abuja, said that Nigeria’s current local demand for palm oil is generally around three million tons, but that is being produced only about 1.02 tons of oil palm.

“So there’s a gap,” he says. We import to fill this gap and Nigeria spends around $500 million annually on this import to date.”

He recalled that the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, had expressed his sadness that Nigeria was still importing palm oil despite the country’s south-south and south-east regions having enough arable land for its production is.

Okomu Oil Palm Company’s agriculture coordinator, Billy Ghansah, said on the occasion that Nigeria needed to plant around 100,000 hectares of oil palm in order to fill the existing gaps in its palm oil production.

Refuting the claim that Asian countries came to pick the palm seeds from Nigeria, the agriculture expert said the basic cultivation strategy of oil palm was developed in Africa, but Nigeria did not take advantage of it. He said the Asians have taken over, so many think they came to pick the seeds from here. “They didn’t do it,” he said, “but they (Asians) used what they had and improved it.”

A senior climate specialist for Africa at Solidaridad, who also serves as Country Technical Lead Nigeria, Sam Ogala, also confirmed that Nigeria could not meet its domestic demand for oil palms.

“This country spends around $500 million annually to import oil palm. That shows you the big gap and that’s because we don’t meet the local demand. In the early 1960s before the oil boom, Nigeria exported oil palms, but after that oil boom we started importing and all kinds of oil palms are finding their way to the Nigerian market,” he added

Top Palm Oil Producers in Nigeria The Nigerian states considered to be the top palm oil producers are Akwa-Ibom, Abia, Rivers, Edo, Imo, Ondo, Bayelsa, Cross River and Delta. But state governments have made little effort to maximize the potential of palm oil production in their areas.

The CBN has implemented several intervention programs to promote agricultural products for domestic, industrial and export consumption. These include the Agricultural Credit Guarantee Scheme Fund, the Commercial Agriculture Credit Scheme, the N220 billion MSME Fund and the Agribusiness/Small and Medium Enterprise Investment Scheme (AGSMEIS).

Palm oil has a wide range of uses around the world including: cooking oil, bio-diesel, lubricants, cosmetics and other applications – household cooking, food and beverage, oleo-chemical, personal care, animal feed and biofuel. Global production of palm oil has increased rapidly since the 1990s, with plantations in Indonesia and Malaysia supplying around 85 percent of global trade.

Two major publicly traded palm oil companies in Nigeria, Okomu Oil Palm Co. Plc and Presco Plc, reported an impressive performance in their annual reports for fiscal year 2021. Okomu grew sales to N37.39 billion from N23.41 billion in 2020, while profit after tax rose to N16.11 billion from N8.69 billion. Its assets increased from N28.62 billion to N34 billion.

Presco Plc recorded sales of N41.11 billion in 2021 compared to N23.89 billion in the previous period. Profit after tax increased from N5.26 billion to N19.82 billion in fiscal 2021, while assets increased from N31 billion to N48 billion. Both companies operate fully integrated agro-industrial facilities with a combined market capitalization of N322 billion.

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