Palm oil imports from Malaysia rose by 353 percent in the first four months of the year despite forex restrictions imposed on the commodity.
According to the latest data from the Malaysian Palm Oil Council, Nigeria’s palm oil imports rose by 72,448 metric tons (MTN) to 92,961 MTN between January and April 2023, up from 20,513 MT imported in the same period of 2022.
In the whole of 2022, Nigeria imported 227,035 MT of palm oil from Malaysia, even with the nation’s borders closed.
“Nigeria’s oil palm imports from Malaysia will continue to increase for the time being because our investment in the industry is still very insignificant,” Henry Olatujoye, managing director, Palmtrade and Commodities Development Nigeria Ltd, said.
“We estimated that our local/domestic consumption is averaging 2.4 million tons in a year, and our first-class developers – Okomu, Presco, and others, do not annually produce up to 800,000 tons.
“If we estimate the pocket smallholder farmers to be contributing up to a million tons, we’d still have a shortfall compared to demand,” Olatujoye added.
Amidst years of stagnant output growth and increasing local demand, Nigeria has experienced a substantial production deficit in the palm oil industry, leading to a significant reliance on imports. Over the past five years, an average of 25 percent of the country’s annual domestic palm oil consumption has been met through imported supplies. This worrying trend underscores the challenges faced by Nigeria in meeting the rising demand for palm oil within its borders.
According to the data, local production in Nigeria accounts for roughly 78 percent of the total palm oil consumption, resulting in a deficit of 0.6 million MT between 2012 and 2021. This deficit emphasizes the significant challenges the country confronts in meeting the growing demand for palm oil domestically.
Alphonsus Inyang, the president of the National Palm Produce Association of Nigeria, emphasized that palm oil prices in Nigeria have surged, making it the most expensive among all Crude Palm Oil producing countries. This price escalation is primarily attributed to the high demand for the commodity.
Inyang further explained, “A metric ton of palm oil sells between N1-1.2 million, depending on your location.” The soaring prices can be attributed to the neglect of primary palm oil production by successive governments, resulting in inadequate funding and limited interest in the sector.
The lack of financial support and government focus on oil palm production has led to the neglect and deterioration of the sector. Consequently, numerous farmers have lost their livelihoods due to insufficient profits for maintenance and expansion, hindering their ability to produce more palm oil.