Scarcity: Manufacturers Order N241bn Worth Of Palm Oil

Hike in price and obvious scarcity have prompted manufacturers to place order for 455,000 tonnes of palm oil worth $409.5 million (N241 billion) It was revealed that local price of the produce is 55 per cent higher than imported palm oil. Findings from the consumers and market indicated that a litre of the commodity has gone up from N1,000 to N1,500, while 20 litres, sold for N19,500 has reached N30,000.

However, in the Malaysian export market, a tonne goes for $900 (N675,000), $18 (N13,500) per 20 litres and $0.9 (N675) per litre. Data released by the Malaysian Palm Oil Council (MPOC) revealed that manufacturers had imported 136,300 tonnes between January and May, 2023 from the projected 420,000 tonnes.

Also, Nord Ventura with 20,000 tonnes is expected at ENL Consortium terminal at Lagos Port next week as Customs duties increased from N422 to N589 per dollar. Nigeria imported 227,035 tonnes in 2022 and 309,911 tonnes in 2021 from Malaysia, leading to 673,246 tonnes imports between January 2021 and May, 2023.

However, it was learnt that local production had grown from 900,000 tonnes to 1.2 million tonnes because of the Central Bank of Nigeria (CBN)’s backward integration to encourage farmers and to discourage importers from spending more than $800 million annually.

Previously, Fitch Ratings had forecast that average crude palm oil prices would be significantly lower in 2023, as industry output would likely be higher. It noted: “We assume Malaysian benchmark crude palm oil prices to average $800 per tonne in 2023, compared with $1,200 per tonne in 2022.”

It would be recalled that Nigerian Ports Authority (NPA)’s shipping data explained that a total of 63,938 tonnes of the produce were imported through the Lagos port in fourth quarter of 2022. The shipping data explained that of the the 63, 938 tonnes offloaded at the sea- ports, Capella discharged 18,051 tonnes at Rivers Port and 10,000 tonnes at Josep-dam, Tincan Island Port.

At the Apapa Bulk Terminal Limited (ABTL), Lagos Port, Fairchem Tiger ferried 4,000 tonnes, while Bruno offloaded 19,887 tonnes to ENL in October and Ma- rie S, 12,000 tonnes at ABTL. Also, statistics by NPA and National Bureau of Statistics (NBS) revealed that the inflows of palm oil imports through the seaports have reached N61.9 billion ($95.2 million).

It was revealed that Lagos Port Complex took delivery of 66,400 tonnes from eight vessels between April and August 2022. Also, in the first quarter of 2022, NBS explained that palm oil importation from Malaysia into the country was valued at ₦13.5billion, leading to 72.1 per cent rise in less than four months.

In 2020, Nigeria imported $351million, making it the 23rd largest importer of palm oil in the world as imports from Malaysia was $242 million or 69 per cent; Singapore, $50.8 million or 14.5 per cent; Indonesia, $44.4 million or 12.7 per cent; Niger, $7.35 million or 2 per cent and Colombia, $3.75 million or 1.06 per cent.

Meanwhile, CBN had said that the country would have been earning approximately $20 billion annually from processing of palm oil, that is, half of the 2022 federal budget. A former Governor of CBN, Mr Godwin Emefiele said over $500 million was being spent annually on the importation of palm oil.

According to him, in the late 50s and 60s, Nigeria was not only the world’s leading producer of palm oil but was the largest exporter of palm oil, accounting for close to 40 percent of the global market share.