Nigeria has recorded static growth rate for four consecutive years in domestic palm oil production.
According to a forecast by the food and agriculture organization of the United Nations, the global demand for palm oil will double by 2020, and triple by 2050.
Data from index mundi and the FAO show that Nigeria has maintained a growth rate of 0.00 percent from 2011-2015. The growth in oil palm production has been stagnant and currently constitutes only 3 percent in world shares of palm oil produce.
In an interview with representatives of the Nigerian institute of oil palm research, they said “Nigeria has indeed maintained static growth rate in domestic palm oil production for some years, but an increase in the growth rate is expected by the end of 2016, as private investment by palm oil dependent businesses have already begun,” they also pointed fingers at poor management practices on plantations for the downturn in supply.
From being the world’s leading producer and exporter of palm oil in the 1960s, and the 3rd largest producer just in 2011, Nigeria has fallen to being a net importer to meet growing domestic demand.
Nigeria has maintained an annual domestic production capacity of 970,000 metric tons since 2011.
The country has a local shortage of 700,000 metric tons, and imports of palm oil have become the best alternative to supplement the low domestic production capacity of the country pending on the development of large estate plantations.
Palm oil is an indispensable produce for the revitalization of the agricultural sector as one hectare of an oil palm plantation is able to produce up to ten times more oil than other oilseed crops.
The most efficient world producers like Malaysia and Indonesia achieve yields as high as eight metric tons of oil per hectare and produce approximately 85 percent of the world’s palm oil; Nigeria currently produces 5 metric tons of oil per hectare which helps explains the deficit and inability to meet up with growing demand.
Demand for palm oil in Nigeria is mainly driven by the household consumers who prefer to consume the technical palm oil because of its flavour profile, but it is complemented by an increasing demand for the special palm oil which can then be fractionated into refined, bleached and deodorized crude palm oil (RBD) to meet industrial demand.
Foods like vegetable oil, biscuits, noodles, margarines, washing detergents and even cosmetics thrive on palm oil. The Noodle industry alone consumes 72,000 MT of palm oil,
“Traditional processing has been very inefficient and the shutting out of crude oil palm in the foreign exchange window has aggravated the shortage of palm oil for industries,” says Henry Olatujoye, The National president of the national palm produce association of Nigeria.
The big players and stakeholders such as PZ, Okomu and Presco with the largest oil palm farms have turned to backward integration and recapitalization to balance the shortage of supply, while food producers dependent on oil palm for their products have already begun investment in the ailing industry to feed their growing demand
“Gender roles have also contributed to the inefficiency of this industry, Traditional processing of oil palm fruits is commonly carried out by women, the men and youth are generally not involved in primary stages of palm oil production, they prefer to serve as mill operators,” says the NPPAN president .
Most cultural practices in the oil palm belt subject traditional processing of oil palm to the older women.
The oil palm belt covers twenty-four states, including all nine states of the Niger Delta. Eighty percent of production comes from dispersed smallholders who harvest semi-wild plants and use manual processing techniques. Several million smallholders are spread over an estimated area ranging from 1.65 million hectares to 2.4 million.
A major problem to be noted is the inefficiency in the value chain for production, where very inefficient processing techniques end up extracting 25-50 percent of the oil, an equivalent of the produce is thrown away as unprocessed palm.
Even with a large area of approximately 2.3 million hectares under cultivation, complaints from insiders in the production chain falls down to the land tenure system of the country, which still stands as a limiting factor against private mass production of palm oil by interested individuals.
The national palm produce association has called on local and state governments to provide land to oil palm farmers to encourage mass production of palm oil.
Private and government Investment is paramount to stimulate palm oil production and to meet up with the growing demand already predicted by the FAO to double by 2020.
MARTINS NOEL
