Overview

The oil palm Elaeis guineensis is native to West Africa, including Nigeria. It produces the world’s largest and most consumed vegetable oil.

• The oil palm gives the highest yield of oil per unit area compared to any oil crop, The Nigerian Institute for oil palm Research’s (NIFOR’S) Tenera has potential yield of 21mt ffb/ha which can achieve 4.4mt of CPO. Palm oil is refined, bleached, deodorized and fractionated into olein and stearin for use in the food industry (margarine, cooking fats, cocoa butter substitutes etc). Presently, Nigeria produces 1.3million mt of vegetable oil out of a national demand of over 1.65million mt, leaving a demand-supply deficit of about 0.35million mt.

Production

Available records show that oil palm is planted to about 2,485,000ha in Nigeria . The unimproved and unorganized Semi-wild Grove (SWG) accounts for 1.995million hectares, while the organized smallholders account for over 340,000ha and the estates account for over 150,000ha. The average yields are 2mt ffb/ha, 8mt fft/ha and 10mt ffb/ha respectively. These yields can be improved upon.   

Processing

The capacity of the upstream industrial and integrated medium/small mills is 683mt ffb/ha. However, most of these mills are over aged and need to be rehabilitated or replaced. There is need for reassessment of existing mill capacities in order to determine the actual need of the country. The major end products of upstream processing activities include:

            Crude Palm Oil (CPO)

            Palm kernel Oil (PKO)

            Palm kernel cake/ mill (livestock feed)

            Palm kernel

            Palm kernel shell

            Empty Bunch Refuse (EBR)

            Palm Oil Mill Effluent (POME)

 About 35-40 major downstream refineries exist with a total capacity of 165,000mt/day. By far, less than 40% of the installed capacity of the mills and refineries is functional.

There is also, need for re-assessment of the existing capacities of downstream refineries to ascertain the current capacity/need of the country.

The major products of the downstream value chain include:

            Refined bleached deodorized palm oil

            Palm oil fatty acid distillated (PFAD for soap)

            Crude palm olein

            Neutralized bleached deodorized palm olein

            Crude palm stearin

            Neutralized bleached deodorized palm stearin

The Position of the FMA&RD on Reduction of Tariff, Granting of Concession and Duty Waiver.

Crude Palm Oil (CPO) import is not a sustainable approach to oil palm development

Granting of further import duty concessions for Palm Oil is undesirable since the understanding reached in the past with beneficiaries to support local producers has not been respected

There is need for the food industries to maintain a good proportion of local content by supporting and patronizing local CPO producers. They should also work towards investing in local production.

One of the ways to ensure parity in the prices of Crude Palm Oil (CPO) from importers and the local operators that would leave the local investors with some incentives for production is by enforcing appropriate duty which is currently 35%.

There is need to ensure that imported CPO are of the right quality and contain Vitamin A which is necessary for good eye sight. This should be done through proper produce inspection and testing before the products are brought in.

Sustenance of ban on importation of vegetable oil refine products.

There is also need to man the borders more effectively to forestall illegal movements of CPO and other vegetable oil products that do not have their origin from ECOWAS countries, but are sourced from farm tanks located within the region.