Why Nigeria can’t benefit from Indonesia’s palm oil export ban – The Sun Nigeria
By Chinyere Anyanwu, [email protected]
Indonesian President Joko Widodo’s plan to ban the export of refined, bleached and deodorized (RBD) palm olein from April 28 to address the rising domestic cost of edible oil in the country , offers Nigeria an opportunity to bridge the palm oil supply gap in the international market . Unfortunately, several factors are mitigating the efforts of the value chain to help the country seize this opportunity.
Nigeria, once the largest producer of palm oil in the world, now ranks fifth in the table of global palm oil production, with 1.5% or 1.03 million tons. metrics of total world production, according to the United States Department of Agriculture (USDA). The country is still unable to meet its own domestic needs.
The country, according to stakeholders in the oil palm value chain, is a net importer of the commodity, producing only about 50% of what it consumes and importing about $580 million worth of palm oil. palm and its derivatives per year. Nigeria in the early 1960s was the world’s largest producer of palm oil with a global market share of 43%, but today produces only 1.4 million metric tons of palm oil , a far cry from Indonesia’s 44.5 million metric tons in 2021. Between 2012 and 2021, Nigeria imported more than 4.1 million metric tons of palm oil, USDA data revealed .
Commenting on the country’s inability to provide an alternative supply to international palm oil buyers, the national chairman of the National Palm Produce Association of Nigeria, Alphonsus Inyang, said he did not see the possibility of Nigeria filling this gap. supply shortfall anytime soon.
Inyang said, “Taking advantage of what is currently happening in the world of the oil palm industry is not feasible for our country”, stating that “this can only alert us to the fact that the oil palm is a global commodity.
For his part, Chief Henry Olatujoye, a board member of the National Palm Produce Association of Nigeria and managing director of Palmtrade and Commodities Development Ltd, said that “Nigeria will not benefit from Indonesia’s blockade on palm exports”.
His reason was based on the fact that since the decline in oil palm production in Nigeria, “we haven’t done much to increase the conversion of our forests to plantations, so we can’t export palm oil from Nigeria to a country on an economic scale”.
According to Olatujoye, “the only benefit Nigeria will get is for farmers who will sell their palm products at competitive prices. The price of the commodity will skyrocket in Nigeria because the palm oil from Indonesia is coming to Nigeria and it will not come back because of the export ban on the commodity in Indonesia, which will create pressure on our production.
He said the price of the commodity has reached N900,000 per metric ton and is expected to still go higher to about 1 million naira per metric ton before the end of the year.
On the way forward for the oil palm value chain, both stakeholders are confident that with government intervention and the right volume of investments being invested in it, the country can in the near future take its share of the international palm oil trade.
On this, Inyang said the country needs to invest in planting and developing new oil palm plantations or surprises like Indonesia’s oil palm export ban will continue to confront it.
Among the government interventions suggested by Inyang is the “One family, 20 palms” program. He said, “Our association, the National Palm Produce Association of Nigeria, has been at the forefront of getting state and federal governments to invest heavily in the value chain, especially state governments that have a comparative advantage in the development of oil palm production, of which there are 14.
“We have to plan. In planning, our association has a program tagged, ‘One family, 20 palm trees’. We invite the government to join us in developing this. Let families plant palm trees; let them plant them in flowers, let them plant them as ornamental trees. They will preserve the environment, they will also create prosperity in rural and urban communities across the country. So far on the program, we have seen no response from the state or federal government.
“Our association lobbied for the Central Bank of Nigeria (CBN) to create an intervention program for oil palm and other tree crops like cocoa, rubber, coffee and possibly coconut , but we could not get a positive response from the CBN. create a special intervention window for tree crops, of which oil palm is one of them. We therefore continue to press for the government to make palm oil a national priority commodity.
Inyang further said that the government should “look at palm oil with the same eye it looks at rice and cotton. CBN has invested a lot of money in the production of cotton, cowpea, sorghum, soybeans and rice, but until today we still import these products. But once you’ve planted a palm tree, you’ve planted it for life. Flood doesn’t affect it, drought doesn’t affect it. The government refused to look at this.
Inyang called on the government to partner with the palm growers association to distribute at least 20 oil palm seedlings to every family in Nigeria to help put palm oil back in its place. He said: “Until this is done, situations like Indonesia’s palm oil export ban will continue to take us by surprise. Indonesia produces 12 million hectares of palm oil while Nigeria still struggles under 700,000 hectares of palm oil.
Olatujoye noted that for Nigeria to increase its oil palm production and play in the export market, it “needs to do more in converting forests to plantations so that we can earn more money and meet our national needs”.
Palm oil, the most produced, consumed and traded edible oil in the world, is used in thousands of products ranging from food, pharmaceuticals to personal care items. Its production in the country has seen a significant decline due to decades of value chain neglect in favor of crude oil.