New Telegraph

CBN policy boosts local palm oil by 360,000 tonnes

The Central Bank of Nigeria (CBN) has boosted local palm oil production by more than 360,000 tonnes in the last one year through its backward integration. The surge in local production is valued at N158.5billion ($343.8million). This was achieved through massive investment and foreign exchange restriction by CBN to discourage importers of the produce as the country spends more than $800million annually on crude palm oil importation. Although, it was gathered that the country was battling with a deficit of 1.79 million tonnes, leading to importation of 450,000 tonnes or 54 per cent increase in 2022 from 225,000 tonnes in 2021. Nevertheless, data from the Nigerian Exchange Group (NGX) revealed that two local palm oil producers, Okomu Oil Palm and Presco Plc, grew their revenue by 83 per cent to N82.47 billion in the first half of 2022 from N45.09 billion in the corresponding period of 2021. However, there was a 29.2 per cent back off in palm oil prices in the fourth quarter of 2022 because of the increased supply from Malaysia and Indonesia, leading to decline in revenue reported by Okomu Oil Palm and Presco Plc. Okomu and Presco’s revenue declined by 36.47 per cent to N26.91 billion in the third quarter of 2022 from N42.36 billion in the second quarter of 2022, bringing total revenue to N59.84 billion in the second half of 2022, 27.43 per cent down from N82.46 billion in the first half of 2022. This year, importers have taken delivery of delivery of 36,999 tonnes of the produce from two vessels at the Lagos Port Complex. According to the Nigerian Ports Authority (NPA)’s shipping data, High Discovery arrived last week with 16,000tonnes, while Aegean Wave offloaded 20,999 tonnes in January, 2023. In 2019, CBN said that 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 yearly. It would be recalled that in the first quarter of 2022, National Bureau of Statistics (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. According to NBS survey, on a month-on-month basis, the price rose by 2.45 per cent from N564.69 recorded in October 2022. The bureau said that the average price of palm oil (one bottle) increased by 29.87 per cent from N775.11 in November 2021 to N1,006.64 in November 2022. On a month-on-month basis, it noted that the item grew by 3.91 per cent from the N968.76 recorded in October 2022. In August, 2022, the shipping data revealed that the country took delivery of 19, 200 tonnes of the produce from Rayyan I laden with 10,200 tonnes; Chem Lyra, 5,000tonnes and Easterly AS Oliva, 4,000 tonnes. Also in 2021, 450, 000 tonnes of produce valued at $445.47million were imported into the country from the estimated total $50.8 billion sold globally. Overall, the value of palm oil imports has accelerated by 51per cent for all importing countries since 2017. In 2020, Nigeria imported $351million, making it the 23rd largest importer of palm oil in the world as imports from Malaysia was $242million or 69 per cent; Singapore, $50.8million or 14.5 per cent; Indonesia, $44.4million or 12.7 per cent; Niger, $7.35 million or 2 per cent and Colombia, $3.75million or 1.06 per cent.

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