FG to create 4 million jobs from oil Palm production

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The Federal Government on Wednesday said it is committed to creating about 4 million jobs through oil palm production in the country .

This was made known by the Permanent Secretary of the Federal Ministry of Industry, Trade and Investment, Sunday Edet Akpan, at the Stakeholders Forum for the presentation of the draft Oil Palm Policy document, held recently in Abuja.

The Permanent Secretary, represented by the Director, Department of Commodity Produce and Inspectorate, (CPI) Omololu Ope-Ewe, said Federal Government is working assiduously towards ensuring the repositioning of the Oil Palm sector for optimal contribution in terms of job creation and revenue sources for both Government and the private sector.

He emphasized in a statement on Wednesday that Oil Palm which once played a predominant role in the Gross Domestic Product (GDP) of the country depends on imported ones to augment local production, which is just about 1 per cent GDP, unlike the contribution of 70 per cent GDP in the past, despite the potentiality in the sector with the propensity to sufficiently and conveniently place the country as a major oil palm producer and exporter, as against what is obtainable in the crude oil sector.

The essence of the national Oil Palm policy is to guide, regulate, protect and support both public and private investment in the sector. He therefore charged stakeholders to put aside personal and organizational interest and consider the draft policy document bearing in mind the impact it would create on the economy.

The Permanent Secretary further said that with the policy in place, the country will have a national document that would protect the sector, due diligence would be done to stimulate investment for higher productivity.

He assured all stakeholders of Government’s support for a robust oil palm industry that … Read More...

Negative margins show why Nigeria must protect palm oil makers

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It is bad times for palm oil makers as poor border policing hits the margins and prospects of industry players.

The government must now protect local players to save their huge investments and encourage more direct investments.

Okomu’s first-quarter (Q1) financial statement shows that revenue declined by 42.5 percent to N4.2 billion, from N7.3 billion in same period in 2018. Similarly, profit after tax declined sharply by 71 percent to N1 billion in Q1 2019 from N3.5 billion in Q1 of 2018. The loss is further reflected on the company’s shares on the exchange board as it dropped by four percent in trading during the course of last week and a year-to-date loss of 2.89 percent.

Presco has not released its result, but experts are not optimistic.  Smaller players are  also hard hit by the state of the market.

Romanus Oguegbu, managing director of a palm oil mill in Uburu, a community in Imo State, is cutting down production. He owns a machanised mill and usually produces 400 gallons (of 25 litres) each week. But this has dropped by half. This has also affected the number of workers he employs. The number of workers has fallen to eight, from over 15 during peak demand.

Santosh Pillai, managing director, PZ Wilmar, a big palm oil producer, told BusinessDay that there are illegal and questionable imports into the country, meaning that genuine investors do not have a level playing field.

“It discourages further investment by investors like us and creates unhealthy competition in the market,” Felix Nwabuko, managing director of Presco, said.

According to a report by the Food and Agriculture Organisation of the United Nations, “It is estimated that Nigeria has lost $10 billion in annual export opportunity from groundnut, palm oil, cocoa and cotton alone … Read More...

Palm oil import from Malaysia rises 57% in Q1 despite increased production

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Despite increase in local palm oil production, Nigeria’s import from global top producer – Malaysia – rose by 57 percent in first quarter 2019, data from Malaysian Palm oil Council (MPOC) shows.

On a year-on-year basis, Nigeria’s crude palm oil (CPO) import from Malaysia increased to 112,480 metric tons (MT) in the first three months of this year from 47,974MT in the corresponding period in 2018.

Experts say the country’s crude palm oil is less competitive to the imported ones owing to the high cost of production, infrastructural gaps, and high logistic cost among others.

According to them, this makes local manufacturers who use CPO as raw materials for production resort to importing the product rather than patronising local producers.

This is evident in the first quarter financial statement of Okomu Oil– Nigeria’s second-largest palm oil producer.

The company reported its weakest first-quarter performance since 2014. The poor performance was due to weaker palm oil prices and consumer demand as well as surge in lower priced CPO into the country.

Okomu’s first-quarter financial statement shows that revenue declined by 42.5 percent to N4.2 billion in Q1 2019 from N7.3 billion in same period in 2018.

Similarly, profit after tax declined sharply by 71 percent to N1 billion in q1 2019 from N3.5 billion in Q1 2018.

Presco, Nigeria’s largest palm oil producer is yet to release its first-quarter financial statement for the year.

“Nigeria has significantly increased its production in the last 10 years but is still importing a lot of CPO into the country and much more is smuggled through the land borders,” Fatai Afolabi, executive secretary, Plantation Owners Forum of Nigeria (POFON), said in a statement.

Since losing its position as one of the world’s largest palm oil producers, Nigeria is yet to … Read More...