Palm Oil importation

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A worker holds harvested oil palm fruit for a photograph at the PT Perkebunan Nusantara plantation and production factory in Kertajaya, Banten Province, Indonesia, on Monday, June 20, 2011. PT Perkebunan Nusantara VIII is a state owned palm fruit plantation and palm oil factory. Photographer: Dadang Tri/Bloomberg via Getty Images
  • Importers spend N116Bn in 2017 for 450,000 metric tonnes
  • Olam gets nod to import 95,000 more, but farmers kick
  • Food import gulps $3Bn per year
  • Local palm oil investors urge total ban
  • Farmers say imported palm oil destroys local investment
  • Importation continues despite ban on 41 items
  • Farmers say cheap Malaysian palm oil is being dumped in Nigeria

 

Codratus Godson

Nigerian farmers and investors in palm produce have cried out urging for total ban on importation of palm oil. It has been among the 41 items banned for importation but in 2017, there seemed to be a waiver hat crashed the price from N25,000 per 20 litres to as low as N8000.

Now, the senate has revealed that Nigerian businesses imported 450,000 tonnes in 2017 alone, amounting to N116Bn. This as Olam is said to have been granted permit to bring in 95,000 tonnes into the country.

Farmers in 2017 were asking if it was true that ban on palm oil importation had been lifted. Their customers were telling them the ban had been lifted and that prices would crash. The prices truly came down, though the high price was said to have been pushed further by non-fruiting of palm treens for two years in 2015 and 2016. The signs on trees are gradually coming back this February, 2018.

Data from the National Bureau of Statistics (NBS) showed that Nigeria spent N14.42Bn in the 2nd quarter of 2017, an increase of N7bn from 1st quarter. If the trend should continue in 2018, the nation may return to importation to increase the food import bill that is already high at $3Bn per year. A senator from Edo State, Francis Alimikhena, has already raised alarm.

Now, reports from Benin indicate that Plantation Owners Forum of Nigeria (POFON) has kicked against the plan by OLAM to the Federal Government to import 95,000 metric tonnes of crude palm oil to the country.

I.M. Umar from Benin reports that the forum which described the application as scandalous and offensive to the collective sensibilities of local palm oil producers and the government, noted that if granted, it has the potential to cripple the rising wave of investment currently being witnessed in the expansions of plantations and processing facilities by both the estates and smallholders.

Emmanuel Ibru, chairman of the forum, who made the remark at a press briefing after an emergency meeting in Benin-City, said the investment was aimed at achieving self-sufficiency in Palm oil production in the short to medium terms. The farmers have cried to the Minister of Agriculter and Minister of Finance, Audu Ogbe Kemi Adeosun, rspetcively.

He said OLAM has applied to the federal government to import 50,000 metric tonnes of Steadin in bulk, 60,000 metric tonnes of crude palm olein, and 50,000 metric tonnes of Palm fatty acid distillates under the West African Trade Liberalization Scheme (ETLS).

He added that the OLAM’s proposal was an affront on the Agricultural Production Policy (APP) and the Economic  Recovery and Growth Plan (ERGP) as well as tantamount to obtaining import waiver to import crude palm oil and illegal importation of prohibited items into the country.

Ibru, who also want commitment of assurance from the minister of finance that action has not been taken contrary to what was agreed by stakeholders in the last December meeting, pointed out that it would go along way to shore up the confidence of plantation owners and other stakeholders in the nation’s oil palm industry.

“For the avoidance of doubt, importation of crude palm oil (CPO) attracts a tariff of 35 percent (10 percent duty plus 25 percent levy). However, other refined vegetable oil products including Olein, Stearin, crude palm olein and palm fatty acid distillates are on the import prohibition list. Ironically, these are the same products that OLAM sought approval to import under ETLS.

“As we write, the cheap Malaysian palm oil is being dumped on our markets from Lagos to Kano and prices have crashed. The big plantations who could hold back are stockpiling. Their storage is being over stretched and they will not be able to harvest fresh bunches to process in the peak season.

“It is more miserable for smallholders in 24 states of Nigeria, who have no storage facilities and are compelled to sell at a loss. The signs are ominous and this untoward situation is being attributed to OLAM importing crude palm oil massively to depress the domestic market.

“Allowing unmitigated palm oil imports into Nigeria under any guise is tantamount to sabotaging the long term investment of plantation owners both existing and new entrants. It is also diminishing and undermining the integrity of the APP and EarGP”, he said.