The Senate has renewed the call to ban the importation of palm oil and its allied products. It came at an auspicious time, which was perhaps, why it enjoyed an overwhelming support of members of the Upper Chamber of the National Assembly and indeed, operators and stakeholders in the palm oil value chain.
Although the fresh push to ban the importation of the product came at a time the Federal Government’s diversification agenda, anchored on increased agricultural production and export, was gathering momentum, the move has come under scrutiny by some experts and critical stakeholders.
Some of them, who spoke with The Nation, described the proposed ban as a welcome development. They were, however, quick to point out that at the 30 per cent installed capacity of the crude palm oil refineries, banning the importation of the product without first addressing its demand/supply gap would be tantamount to putting the cart before the horse. For instance, General Manager, External Affairs, PZ Cussons Nigeria Plc, Mr. Muhammed Tahir, said he supported the move to ban the importation of palm oil into the country as this would boost local production. He, however, told The Nation that the crude palm oil refineries operate at about 30 per cent installed capacity.
The implication of this, he said, was that there was the need to ramp up local production by addressing the issues around the supply of crude palm oil to the refineries. According to him, at 30 per cent installed capacity, the refineries cannot meet demand by individual and industrial users. To him, addressing the demand and supply gap for palm oil is important before banning its import.
The upper chamber of the National Assembly, recently started fresh move to ban the import of palm oil and its allied products. Waxing patriotic, Senator Francis Alimikhena of the All Progressives Congress (APC), Edo State, said the importation of the product was a threat to the government’s campaign on diversification.
The lawmaker, who sponsored the motion, titled: “Urgent need to halt the importation of palm oil and its allied products to protect palm oil industry in Nigeria” and also led the debate, recalled with nostalgia that Nigeria, before the 1970s, was a global powerhouse in palm oil production and export.
Alimikhena, however, lamented that the country lost her leadership position in the global palm oil trade, forcing her to import about 450, 000 tons of palm oil to the tune of N116.3 billion in 2017 alone. He, therefore, insisted that the government must reverse this trend.
The lawmaker was right. Nigeria was the world leading producer of palm oil in the 1950s and mid-1960s. She was reportedly supplying about 645,000 Metric Tons (MT) of palm oil yearly to markets across the world and boasting an enviable global market share of about 43 per cent.
Palm oil alone accounted for 80 per cent of Nigeria’s export earnings. It also created millions of direct and indirect employment opportunities for Nigerians. Malaysia, one of the Asian emerging markets, was even said to have obtained the oil palm seedling with which she built her thriving oil palm business from Nigeria.
Although the Asian Tiger has since refuted this claim, it, nonetheless, underscored Nigeria’s towering status and visibility in the global palm oil industry. Curiously, from controlling over 40 per cent market share, Nigeria has since lost her grip on the business. She accounts for a paltry seven per cent of total output.
Malaysia and Indonesia have since surpassed Nigeria as world’s leading palm oil producers and exporters, retaining the second and first position, respectively. Sadly, Nigeria, as at 2016, fell to an unenviable fifth position.
While Indonesia produces 32 million tons of palm oil, Malaysia boasts 17.7 million tons. And they have been exporting palm oil products to Nigeria. The country, which was once the bride of the international palm oil business, is now a net importer of palm oil to meet her growing domestic demand.
Africa’s largest economy has between 450, 000 and 500, 000 tons annual palm oil supply shortage, made up of about 300, 000 tons of Technical Palm Oil (TPO) for the production of soap and about 200, 000 tons of Special Palm Oil (SPO) used in the food industry.
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