Nigeria has made bold steps towards becoming self-sufficient in edible oil production as it aims to increase palm production by 700 percent to 5 million tonnes by 2027.
As part of the efforts, the Nigerian government recently formulated a new policy to invest some US$500 million in expanding palm oil production.
The government said it will encourage investment by offering low-interest loans to farmers for oil palm cultivation and erecting barriers on crude palm oil imports.
This will see the country marginally increase total edible oil production from its 2018/19 estimate of 1.0 million with forecast indicating that the country’s palm kernel oilseed production will reach 880,000 metric tons by the close of the year.
This will represent a 20.5% increase from an estimate of 730,000 metric tonnes produced last year, according to a report by the U.S. Department of Agriculture (USDA).
Increasing domestic demand has also pushed the area under harvest to slightly over 3 million hectares this year from an estimated 2.5 million hectares put under the crop last year.
The report forecasts Nigeria’s 2019/20 palm oil production to reach 1.14 million tonnes, up 12 percent compared to the previous year.
Nigeria has the potential to become a significant market for oilseeds, oil meals, and oils for domestic and industrial consumption. The country ranks third in the world in terms of land area planted with oil palm, but it is only the fifth largest palm oil producer due to low yields.
The sector has continued to witness a downturn with contribution to global market share tapering to a scanty 1.4per cent as at 2018, with Indonesia and Malaysia leading in the global production. Nigeria is currently a net importer of edible oils.
The country’s Nigeria’s oil palm imports in the three months to end March 30, 2019 reached a total of 112,480 metric tonnes as the country continues to implement strategies to ensure self-sufficiency in oil palm production.
However, there is growing private sector investment in palm kernel (for oil) plantations, with a greater utilization of modern harvesting tools and farm equipment; harvesting efficiency is increasing.
Notably, manufacturers like DUFIL a leading cooking oil refiner and Singapore-based palm oil producer PZ Wilmar have partnered with local growers forming massive palm kernel plantations in Nigeria’s Cross River State.