The Bug In Nigeria?s Palm Oil Industry


wpid-oil-palm.jpgBy Odimegwu Onwumere

?One of the points raised in a letter that the National Chairman of Vegetable/Edible Oil Producers Association of Nigeria, VEOPAN, Mr. Okey Ikoro wrote to President Goodluck Jonathan in Abuja on Tuesday, July 9, 2013, was that Nigeria was the principal producer and exporter of palm oil palm produce and allied products in the 60s. This was in relation to 27 per cent of the global market with 167,000 metric tonnes in 1961. But Ikoro frowned at the abysmally declination of Nigerian production in 2008 which was put at 25,000MT, while the world production increased from 629,000MT to 33.3 millionMT within the same period.?TheVEOPAN, nevertheless, called on the Federal Government to support the setting up of N100bn Oil Palm Development Fund to revitalise the palm oil sector.?

About 75 percent of the export of palm kernels in 1832, came from Nigeria. And by 1911, ?British? West Africa alone exported 157,000 tonnes. Malaysia, which has surpassed Nigeria in this business, was not originally a palm oil producing country. In the 1870s, British administrators took the seedlings to that country and in 1934, Malaysia became the largest exporter of the product. Nigeria and Zaire were originally leading the world in the production and export of palm oil throughout the first half of the 20thCentury but in 1966, Malaysia and Indonesia had surpassed Africa?s total palm oil production.

SOCFIN S. A., founded in 1912, was the first industrial company to plant oil palm in Africa and Indonesia.?Palm oil was the mainstay of Nigeria?s economy before the crude oil was explored. There were stringent strategies used in palm oil distribution in various markets across the country. The local markets were not pre-tested before palm oil could be sold. Many marketers did store the produce during the peak, while many did not. There used to be high and low storage by marketers. A large percentage of men and women were involved in the business. Prices varied during the peak period and during the tilting season.

The Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina in a discourse stressed that it was disgusting that Nigeria, which was leading the world in palm oil production and distribution is today, importing crude palm oil. Angered by this development, he vowed to reverse the trend. In 2012, Nigeria started the distribution of sprouted oil palm nuts and gave 1.4 million sprouted nuts free. The farmers, according to him, have to recapitalise their plantations. He asserted that the Tenera seedlings are high-yielding. He also declared that two of the best performing stocks in the Nigerian Stock Exchange, are from the oil palm industry and the government intended to guarantee that it stays so.

It used to be a profitable venture, when palm oil was sold in drums, jerry-can, and bottles in the local markets in a large quantity. Many people were gainfully employed in the business despite bad roads which made transportation very difficult and lack of extension services. It was not easy then. The good news today is that there is a?N10billon palm oil refinery being constructed by PZ Wilmar Limited. The company ostensibly described the refinery as the biggest in Nigeria. The refinery has state-of ?the-art technology with a capacity of 1,000, 000 tonnes per day.

In a recent interview the chief executive officer of PZ Cussons Nigeria Plc, Mr. Christos Giannopoulos, said that the palm oil refinery is situated in Ikorodu, Lagos State and supported with a 50,000 hectares of plantations. With the investment of about N100 billion over the next few years, the refinery would create about 11,000 significant jobs and over 32,000 circuitous jobs at an-assortment-of skill levels. There are companies like Wilmar Ltd with expertise in international palm oil business, which is partnering with Pz Wilmar Limited to revolutionise the palm oil industry.

In November 2012, the company had commissioned a 32,000 hectare palm plantation in??Cross River State, with over 600,000 high yield??palm plants been??transplanted with 2.1million of seedlings at four nursery sites.?To build?capacity among stakeholders in the palm oil industry in the country, a Roundtable on Sustainable Palm Oil (RSPO) Africa Roadshow was organised in Nigeria on September 24, 2013. It was a two-day event aimed at creating awareness and capacity building among partners in the industry, like the Solidaridad West Africa and Proforest Initiative (UK), supported by RSPO-Nigeria National Interpretation Initiative.

Not too long ago, the Vegetable/Edible Oil Producers Association of Nigeria presented a Draft Bill to the National Assembly seeking for the establishment of an Oil Palm Development Fund with the aim of fostering the production, processing, utilisation and exportation of oil palm in the country.?The?Vegetable/Edible Oil Producers Association of Nigeria are of the opinion??that the?N100bn development fund??sought has become very necessary as the country urgently needs viable alternatives??to crude oil in the country?s economy.

The Okomu Oil Palm Company, with a surveyed area of 15,580 hectares out of which 12,500 hectares supposedly could be planted with oil palm was established in 1976, by the Federal Government with the aim of rehabilitating oil palm production in Nigeria. But this initiative called ?Pilot Project??failed to achieve its aim.

Okomu Oil Palm Company was incorporated on December 3, 1979, as a Limited Liability Company. The company had ongoing plantation operations in places like Cote D?ivoire, Liberia, Guinea, Cameroon, Kenya and Indonesia. By 1990, the Technical Committee on Privatisation and Commercialisation (TCPC) privatised the Okomu Oil Palm Company on behalf of the Federal Government of Nigeria.

Nigeria has lately been aspiring to develop her oil palm production on sustainable and universally acceptable principles to meet targeted period when investors in the agro-sector are to have their products officially-stated. Stakeholders in the business of palm oil in Nigeria are also raising consciousness on the best practices to improve palm oil production and marketing of the produce in the country, especially, in the?24 producing States of Abia, Akwa Ibom, Cross River, Rivers, Bayelsa, Imo, Anambra, Ebonyi, Enugu, Delta, Edo, Ondo, Ogun, Osun, Oyo, Ekiti, Benue, Kwara, Kogi, Nasarawa, Plateau, Taraba, Adamawa and Kaduna (Southern Kaduna). The?stakeholders in the business of palm oil in Nigeria?include growers/millers, processors, associations, NGOs/environmentalists, financial sector, development agencies, state governments, federal ministries, government parastatals and manufacturers/end-users, amongst others.

With the glaring lackadaisical approach of the Federal Government to implementing serious business-oriented measures that would drive the local palm oil, the neighbouring African countries saw this as an opportunity to enter the country with their own palm oil. The Federal Government through the Minister of Agriculture and Rural Development Dr. Akinwumi Adesina, on June 1, 2013 bemoaned how statistics firmly showed that the closest West African countries to Nigeria, flood Nigerian market with most of the palm oil they import from Malaysia, Indonesia, Singapore and others duty-free; thereby displacing locally produced palm oil from the market and suffocating the Nigerian oil palm plantations.

Adesina maintained that it is possible for Nigeria to become self-reliant in palm oil production, giving his experience with the pressure mounted by interest groups on the President for waivers on rice and his refusal to grant same. Nigeria, he said, is on its way to self-sufficiency in rice production. He said that such stringent measure has to be applied to the palm oil industry if Nigeria must revitalise the industry, because every country must do what is in its best interest.

Stating the obvious, Adesina said that Nigeria should be producing and exporting to those countries. And this succinctly has shown the reason the National Chairman of Vegetable/Edible Oil Producers Association of Nigeria, VEOPAN, Mr. Okey Ikoro was snivelling.??Adesina added that Nigeria should not be using those countries as passage areas.

Regional trade, he said, does not mean that there must be importation into Nigeria, like the neighbouring West African countries whose crude palm oil import far exceeded their needs. A good example is Benin Republic whose local production stagnated in the past ten years while their import increased by 1,018 per cent.

In his figures, these countries import increased by 1,084 per cent of crude palm oil. Ghana?s production was also stagnant for the period. Their?export?rose by 62 per cent. Cote d?Ivoire production declined by 20 per cent during the period, but their?export?rose by 74 per cent. From all the evidence Adesina said that he had seen, it appeared they?re re-exporting into Nigeria, which is killing the oil palm industry in Nigeria

Odimegwu Onwumere, a Poet/Writer, writes from Rivers State.

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