BusinessDespite Forex Restrictions, Palm Oil Importation Gulps N28.16bn in 6 Months

Despite Forex Restrictions, Palm Oil Importation Gulps N28.16bn in 6 Months

Nigeria imported palm oil to the tune of N28.16 billion in the first six months of 2022, as the value of agricultural commodities shipped into the country maintained an upward trend. Palm oil falls under the nation’s foreign exchange restrictions; it is among the 41 import items banned by the Central bank of Nigeria (CBN) for Forex Exchange. This implies that importers are to source their foreign exchange from alternative avenues such as the parallel market.

Data by the National Bureau of Statistics (NBS) in its ‘Foreign Trade in Goods Statistics Report’ for the second quarter of the year (Q2 2022) showed that the figure represents a 5.2 percent increase over the corresponding period of 2021 which recorded a value of N26.77 billion.

The report published on the official Website of the nation’s statistical bureau further showed that palm oil importation in Q2 2022 was N14.64 billion against N13.52 billion in the previous quarter, representing an increase of 8.3 percent. The commodity which was classified as ‘Crude Palm Oil’ was imported mainly from West African and Asia.


The country shipped in palm oil valued at N14.64 billion from Cote d’Ivoire in Q2 2022, while Malaysia and China supplied N13.50 billion and N0.02 billion of the commodity respectively in Q1 2022. In Q2 2021, Africa’s biggest economy imported N15.09 billion of palm oil from Singapore and N11.68 billion from India totaling N26.77 billion.

The NBS report further showed that Nigeria’s agricultural commodity importation accelerated during the periods – jumping from N1.094 trillion in HY 2021 to N1.105 trillion in HY 2022, reflecting an increase of 10 percent. Aside from palm oil, Nigeria imported Wheat totaling N131.54 billion in Q2 2022 against N130.60 billion in Q1 2022.

The Q2 2022 wheat importation comprised N70.67 billion and N60.87 billion from the US and Lithuania respectively. The N130.6 billion in Q1 2022 was made up of N71.56 billion from the US and N59.04 billion from Argentina as Nigeria sought alternative sources to Russia and Ukraine (its traditional suppliers) which have been engaged in a severe war since February, 2022.

The Q2 2021 wheat supplies totaling N218 billion came mainly from the US, Canada, Argentina and Lithuania. Frozen food items (blue whitings) were imported from Russia and The Netherlands in Q2 2022 to the tune of N13.39 billion and N7.31 billion respectively.

“Total imports of agricultural goods imported in Q2, 2022 stood at N454.45 billion or 8.55 percent of total imports in Q2, 2022. This shows an increase of 4.76 percent when compared to the value recorded in Q1, 2022 (N443.36 billion) and rose by 13.70 percent compared to the value recorded in Q2, 2021 (N408.49 billion)” the NBS stated in its report.

Palm oil is a highly sought commodity among manufacturing and processing firms which use it as raw material for the production of various consumer and industrial goods.

The CEO, Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said that the palm oil produced in Nigeria is grossly inadequate, adding that the users would pay any amount to bring in the commodity if it would boost their margins. “When products are expensive, it has a way of benefiting the producers because they will adjust their prices to maximize their profit”, Yusuf, immediate past director-general, Lagos Chamber of Commerce and Industry (LCCI) told THEWILL in a telephone chat.

An operator of a medium-enterprise palm oil processing firm, Emmanuel Ebong said the NBS figures do not reflect the actual value of the commodity that is shipped into the country. “A large quantity of palm oil is smuggled across the borders, particularly from Cameroun and Benin Republic. It is a huge business among the inland waterway transporters plying between Nigeria and the neighbouring countries. They are the real suppliers to the large manufacturing firms using the commodity”.

The deputy director, department of agriculture in the Ministry of Agriculture and Rural Development, Benard Okata, said Nigeria is spending about $500 million annually on oil palm importation in order to complement existing gaps in the sector.

Okata, who made this remark at the national workshop on oil palm organised by Solidaridad, an international non-governmental organisation in Abuja in November 2020, said that Nigeria’s current local requirement for palm oil generally is about three million metric tonnes, but that it is producing only about 1.02 metric tonnes of oil palm.

“So, there is a gap,” he said. We import to make up for this gap, and Nigeria is spending about $500million annually for this importation up till now,”

He recalled that the governor, Central Bank of Nigeria (CBN) Godwin Emefiele, had expressed sadness that Nigeria was still importing palm oil in spite of the sufficient arable land in the South-South and South-East regions of the country to produce it.

The agriculture coordinator, Okomu Oil Palm Company, Billy Ghansah, had said at the occasion that for Nigeria to fill the existing gaps in its palm oil production, there is a need to plant about 100,000 hectares of oil palm.

Debunking the claim that the Asian countries came to pick the palm seeds from Nigeria, the agricultural specialist said the basic cultivation strategy of oil palm was developed in Africa, but Nigeria didn’t take advantage of it. He said the Asians took over, such that many think that they came to pick the seeds from here. “They didn’t,” he said, “rather they (Asians) made use of what they had and improved it.”

Also, a Senior Climate Specialist for Africa at Solidaridad, who doubles as Country Technical Lead, Nigeria, Sam Ogala, affirmed that Nigeria was not meeting its domestic demand for oil palm.

“This country is spending around $500m annually to import oil palm. That shows you the huge gap, and it’s because we are not meeting local demand. In the early 1960s before the oil boom, Nigeria was exporting oil palm, but after that oil boom, we started importing, and all forms of oil palm are finding their way to the Nigerian market,” he added

Top producers of palm oil in Nigeria Nigerian States that are considered to be the largest producers of palm oil are Akwa-Ibom, Abia, Rivers, Edo, Imo, Ondo, Bayelsa, Cross River and Delta. But the state governments have not made significant efforts towards maximizing the potential of palm oil production in their areas.

The CBN has introduced several intervention schemes towards boosting agricultural produce for household and industrial consumptions as well as for export. These include the Agricultural Credit Guarantee Scheme Fund, the Commercial Agriculture Credit Scheme, the N220 billion MSMEs Fund and the Agribusiness/Small and Medium Enterprise Investment Scheme (AGSMEIS).

Palm oil has numerous usage globally which include: Edible Oil, Bio-Diesel, Lubricants, Cosmetics, and other applications – household cooking, food and beverages, oleo Chemicals, personal care, animal feed and bio-fuel. Global production of palm oil has increased rapidly since the 1990s, with plantations in Indonesia and Malaysia supplying around 85 percent of the global trade.

Two major quoted oil palm companies in Nigeria, Okomu Oil Palm Co. Plc and Presco Plc reported impressive performance in their FY 2021 annual reports. Okomu grew revenue from N23.41 billion in 2020 to N37.39 billion, while the profit after tax rose to N16.11 billion from N8.69 billion. Its assets jumped to N34 billion from N28.62 billion.

Presco Plc recorded a N41.11 billion revenue in 2021 from N23.89 billion in the preceding period. Post-tax profit increased to N19.82 billion in FY 2021from N5.26 billion while its assets rose from N31 billion to N48 billion. Both firms operate fully-integrated agro-industrial facilities with a combined market capitsation of N322 billion.

About the Author

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Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.

Sam Diala, THEWILL
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.


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