Nigeria spends $347.7 million on importation of palm oil as local output dips

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Nigeria has imported not than 475,000 metric tons of crude palm oil valued at N125.2 billion ($347.7 million) in the last one and half years,
It was gathered that 300,000 tons of the commodity were imported in 2017, while additional 175,000 tons had been imported between January and June 2018.
Investigation by this newspaper revealed that local production had remained static at 970,000 tons since 2015, while importation has been on the increase.
Manufacturing firms and other importers of the product pay a duty of 35 per cent. This year, Nigerian ports are expected to take delivery of 350,000 metric tons of crude palm oil valued at N125.2 billion ($347.7 million).
The imports would be 16.7 per cent more than the 300, 000 tons delivered in 2017, as the global price of the product had dropped from $979 (N306,385) per ton to $732 (N263,520) per ton.
According to the Nigerian Ports Authority (NPA)’s shipping position, Lagos Port Complex, MV Tina Theresa has arrived at the Lagos Port complex on Sunday this week with 5,700 tons at the Apapa Bulk Terminal Limited (ABTL), while MV Champion Cornelia is currently offloading 4,999 at Josepdam in Tincan Island Port.

In March 2018 alone, the country imported 55,699 tons, as annual consumption is 2.4 million tons.
It was learnt that Nigeria has a deficit of 900,000 tons following huge demand by manufacturing firms, which depend on cheap imported palm oil from Malaysia and Indonesia
Nigeria is among the top five markets for Indonesian crude palm oil in the last three years.
Despite the short supply, it would be recalled that the Senate had, last February, called on the Federal Government to ban the importation of palm oil into the country in order to protect local production.

The lawmakers feared that importation of palm kernel and allied palm products were threats to the government’s campaign on diversification of the economy through increased agricultural production and exports.

Meanwhile, the country’s current local consumption is estimated at 2.7 million tons but it needs additional 1.7 million tons to meet its local demand.

Already, the World Economic Forum (WEF) said that palm oil market would expand to an estimated $88 billion a year by 2022.

It would be recalled that in 2016, Indonesia reduced its export tax for crude palm oil between 0 and 22.5 per cent to encourage the importers from Nigeria and other countries.

Also, it imposed a $50 per metric ton levy on crude palm oil exports and a $30 per metric ton levy on processed palm oil products.

Indonesian Vegetable Oil Refiners Association (GIMNI), has explained that the growth in exports of palm oil and processed palm oil products to major markets would continue, as the country had a long-term target of producing 40 million tons of crude palm oil per year from 2020.

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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