Nigeria’s palm oil imports rose from 302,000 tonnes in 2017 to 600,000 tonnes by end of 2018, costing the country as much as $500 million, despite placing the commodity on a forex-exclusion list, central bank figures indicate.
Sunday 16, June 2019
(Bloomberg) --Nigeria plans to increase its palm oil production 700 per cent over the next eight years to help improve its foreign-exchange earnings that are largely dependent on crude oil exports.
The Trade and Investment Ministry said that the new policy will boost local production to about five million tonnes from 600,000 tonnes a year by investing as much as NGN 180 billion($500 million) beginning this year.
“Our policy objectives over an eight-year period (between 2019 and 2027) will see that we locally produce 100 per cent of local crude palm oil demand by 2027, increase revenue from importation via duties and deliver 225,000 full-time jobs and at least 450,000 seasonal jobs,” the Trade Ministry said.
The new policy also seeks to remove the 75 per cent duty rebate granted on refined palm oil imports and extend a current three-year tax holiday for all producing and processing companies to five years.
Additionally, it will introduce a five-year restriction of crude and refined palm oil importation to large-scale refineries and crushing-plant owners.
Farmers will be given access to loans at nine per cent annually through central bank-administered lending to expand cultivation by at least three million hectares.
Felix Nwabuko, the Chief Executive Officer of Presco said that the firm is driving an expansion plan that expects a 500-tonne capacity refinery to begin operating in the first quarter of 2020, with an additional increase of its milling capacity from 60 tonnes an hour to 90 tonnes an hour by next January.
By 2022, the largest palm oil producer in Nigeria expects to push capacity to 210 tonnes an hour, with an additional 60 tonnes per hour in milling facilities, Nwabuko said.
While Nigeria wants to grow quickly in palm oil, it’s still likely to be a small part of a market dominated by Indonesia and Malaysia. The country currently ranks as the world’s fifth-biggest producer in palm oil, accounting for less than two per cent of global production.