Nigeria missing from major palm oil producing countries
Despite being heavily endowed with palm trees in some parts of the country, Nigeria was conspicuously missing from a recent list of major palm oil producing countries.
A 2020 report compiled by a leading market research outlet, Research and Markets, listed Indonesia, Malaysia, India, Colombia and the European Union as major palm oil producing nations in 2020.
With world’s production volume of 1.03 million metric tonnes output, Nigeria produces 1.05 per cent or 1.03 million metric tones, making it the fifth largest palm oil producing country, in the world, according to the United States Department of Agriculture.
Nigeria is, however, the largest consumer of palm oil in Africa.
A research by PriceWater- Coopers (PwC) put the total fats and oils consumed by Nigeria in 2018 at three million metric tonnes, with palm oil accounting for 44.7 per cent or 1.34 million metric tonnes. In the same period, production stood at 1.02mmt, resulting to supply shortfall of 0.32mmt (excluding possible impact of palm oil exports).
The situation is a departure from the early 60s when Nigeria commanded global palm oil market share of 43 per cent. From being one of the leading exporters of crude palm oil in the 1960s, Nigeria is today a net importer.
The country currently commands less than two per cent of total global market production of 74.08mmt. Malaysia and Indonesia had, in 1966, surpassed Nigeria as the world’s largest palm oil producers.
Since then, both countries combined produce approximately 80 per cent of total global output, with Indonesia alone responsible for over half i.e. 53.3 per cent of global output.
According to the Central Bank of Nigeria, if Nigeria had maintained its market dominance in the palm oil industry, the country would have been earning approximately $20 billion annually from cultivation and processing of palm oil.
In a report titled: “Global Palm Oil Market: Insights, Trends and Forecast (2020- 2024), researchers noted that factors such as increasing population, rising biofuel production, growing skincare market, accelerating personal disposable income and escalating application in various markets were expected to drive the global palm oil market.
The World Bank had over a period of more than 60 years injected nearly $2 billion into over 45 projects in South East Asia, Africa, and parts of Latin America to support the growth of the palm oil industry. Indonesia received $618.8 million, which was the highest funding.
Nigeria received the second highest funding of $451.5 million followed by Malaysia with $383.5 million in project funding. Nigeria could not meet its quota of palm oil supply and so had to depend on importation to fill the gap.
Source: New Telegraph
