Advertisements
Business

Charting way forward for oil palm production

The global oil palm valued at $45 billion has provided a platform for countries to power their growth. However, Nigeria has not been able to compete with other producers.The path to unlocking the potential of the sector is investing in farmers, trees and fertiliser. Efforts, experts say, should be made to increase investments to enable the sector realise its goals, writes DANIEL ESSIET.

 

The oil palm sector constitutes a significant per cent of the global agricultural economy. It is a vital contributor to export earnings. Its international market is worth $45 billion and is expected to hit $64 billion by the end of 2026, growing at a compound annual growth rate (CAGR) of 5.2 per cent between 2021 and 2026, according to Global Palm Oil Market Report 2020.

Aside, an economic intelligence report, Statista, put the global production of palm oil at 75.7 million metric tonnes.

The International Trade Centre said the high demand for palm oil is pulled by a growing population, rising incomes and urbanisation.

 

Implication of this to the industry?

 

With the global population set for significant changes from now to 2050, the industry needs to start positioning itself to take advantage of these developments.

The global food industry is reliant on oil palm imports to meet demand.

The  Food and Agriculture Organisation (FAO) said oil palm is grown commercially in at least 43 countries and accounts for almost 10 per cent of the world’s permanent crop land. It is grown in Asia, Africa and Latin America.

Indonesia and Malaysia are the main palm oil producers, followed by Thailand, Colombia, and Nigeria.

Nigeria is lagging behind in the  race for world market share of oil palm. Her production is estimated at 0.94 million tons of palm oil.

Nigeria produces 900,000 metric tons of palm oil, but national demand stands at between 1.7million and 2.1 million tons (MT).

According to PWC, the nation consumes three million metric tons of fat and oil, with palm oil, accounting for 44.7 per cent or 1.34 million MT.

Experts say Nigeria has a demand-supply gap of 800,000 metric tons in the palm oil market.

Sadly,  Nigeria was the world’s largest palm oil producer with global market share of 43 per cent in the early 60s. Today,  PWC said Nigeria  is the fifth largest producer with less than  two per cent of total global market production of 74.08 million metric tons.

Planted areas in Nigeria are estimated to be less than 400,000 hectares, but the significant local and foreign investment could triple that area over the next five years.

However, if the industry is going to succeed, in the high end market, experts say the farmers will require further enhancement to compete with Indonesia and Malaysia, leaders in the world stage.

One of them is the National President, National Palm Produce Association of Nigeria (NPPAN) Mr. Alphonsus  Inyang. He   stressed that investment and reinvestment are key to revamping the industry, including a sustainable business environment. These, he noted, with other factors would get the oil palm sector to levels of prosperity envisioned by the government.

Another challenge of the sector is the ageing profile of plantations, accompanied by declining yields.

For Nigeria to become the leading producer of oil palm, Inyang said, the nation needs to plant at least 1.2million hectares of the produce yearly over the next 10 years.

“Nigeria’s total number of hectares is 360,000, both estates and small holder farms across 24 states. To meet up with the position of Indonesia, we have to plant at least 1.2million hectares per year over the next ten years,” he said.

According to the NPPAN chief, although Nigeria’s palm oil is the most expensive in the world, her production capacity is less than 50 per cent of local demand. He said Nigeria’s yearly production is 200,000 metric tons  while demand is over one million yearly.  The sector has, however, stagnated over the last two decades as the government turned its focus away from agriculture to oil.

According to the Global Import Data from the United States Department of Agriculture, Nigeria spent about N504 billion on palm oil import.

 

Imports

 

Nigeria imported palm oil from Malaysia and Asia and from Cote d’Ivoire and Benin – two neighbouring countries with less land mass.

Dr Celestine Ikuenobe.kkkThe oil palm industry has not shown such robust growth as other industries during the past 10 years. This is reflected by the country’s stunned production and average export figures.

The Managing Director, OCP Africa Fertilisers Nigeria Limited, Mr. Mohammed Hettiti, believes Nigeria oil palm  is primed for growth and has the potential to be one of the main global drivers in the future due to land availability.

Hettiti wants Nigeria to invest to boost the cultivation of oil palm and production of palm oil.

 

Case for oil palm

 

Global palm oil production is dominated by Indonesia and Malaysia. These two countries account for about 90 percent of total global palm oil production.

Nigeria hopes to become a major producer of palm oil. One of the factors affecting the growth of the industry is poor seed quality among some farmers which results in lower yields and lower oil content.

Consequently, oil palm agronomists from Nigerian Institute for Oil Palm Research (NIFOR), Benin City, Edo State are focused on enhancing growth and development of nursery seedlings so that transplanted oil palm start yielding and comes into maximum oil production sooner, while making field plants more resilient to disease.

The targets, according to the Executive Director, NIFOR, Dr Celestine Ikuenobe, are increasing yields per season and extending economic life by breeding better oil palm trees from which bunches can be easily harvested.

Ikuenobe believes stakeholders need to align, take ownership and develop a joint action plan to transform the sector.

 

Climate suitability

 

Studies have shown that oil palm trees grow in warm and wet conditions. In Niheria, most states meet the climatic requirement for oil palm cultivation, including average  yearly temperature.

There are few areas with tropical rainforest with 1780-2280 mm  yearly rainfall. However, states, such as River, Delta and Akwa Ibom, present a wide range of soil types that are well watered.

 

Small holders

 

Smallholder farmers play important role in the palm oil industry.They manage just two hectares of land and they contribute to over a third of the nation’s total palm oil supply.

Unlike large multinational companies with unwavering access to capital and resources, Ikuenobe said smallholder farmers cannot afford the vast investment required to switch to long-term sustainable practices and many are simply unaware of how to productively manage their crop.

The NIFOR chief said empowering smallholders will help to transform the palm oil industry, and ensure the nation has a secure supply of a vital ingredient.

 

Towards a burgeoning palm oil industry

 

Working closely with research institutions in the sector, OCP Africa is initiating an ambitious endeavour that will transform all aspects of the oil palm value chain.

It will open new frontiers to opportunities and position Nigeria as a force within the global oil palm economy.

OCP Africa has signed an agreement with Agricultural Research and Training (IAR&T) and NIFOR to power a project that will create the conditions for the emergence of a large oil palm undertaking. Part of the agreement is to strengthen the capacities of farmers.

He said OCP Nigeria would tackle agricultural challenges and provide  sustainable solutions to food systems, stressing that the company’s approach was science-driven.

He said OCP Africa would continue to work with local partners to develop specialty fertiliser for different crops across Nigeria. “To address these important issues, the co-operation of agreement being signed with the research institutes is the right step in the right direction to formulate fertiliser that would boost production of the staple crops,” he said.

He assured that his organisation would remain committed to the Federal Government’s effort to boost food security and create wealth and employment in the agricultural sector.

IAR&T Director, Prof. Veronica Obatolu said oil palm is a strategic commodity for the country’s development.

For oil palm to grow, Mrs Obatolu said the land should be able to meet the agro-ecological requirements for maximum yield.

The Minister of Agriculture and Rural Development, Sabo Nanono, stated that it was timely for OCP Africa Nigeria to come into the sector with various interventions, particularly in the fertiliser sub-sector to enable farmers to have access to the input at the right time.

“We really thank OCP Africa, for coming to Nigeria and partnering us to provide raw materials for us and our blending plants to produce fertilisers for our farmers and help move the agriculture sub-sector indeed forward.

 

Testing for soil fertility

 

According to experts, oil palm requires balanced and the sufficient amount of micro and micro-nutrients for production.

Speaking with The Nation, Obatolu said soil health and fertility status is best determined by an on-site sampling of soils, submitted for laboratory analysis.

 

Need for national soil survey

 

The Vice-President, Soil Science Society of Nigeria, Prof. Damian Okwudiri Asawalam, said the nation has not achieved a remarkable progress  with outdated soil surveys.

Asawalam, who is a Professor of Soil Science at Michael Okpara University, Umudike, Abia State, said the  soil maps are outdated.

He said a comprehensive soil survey is crucial in tackling the country’s low farm productivity, a challenge made more acute by climate change.

To help combat this, he  said Nigeria needs a soil survey to enable fertiliser to be matched with local soil conditions and crop requirements.

He said there was a need to execute a National Soil Survey Project, including soil fertility surveys, to help stakeholders in oil palm and other farming areas make appropriate crop-based nutrient recommendations as well as sound management practices.

 

Way forward

 

The Country Manager, OCP Africa, Caleb Usoh, identified best agronomy management practice and yield intensification technology as key to boosting oil palm production. He said improving fertilising rates was important for plantations looking to expand their plantings.

He said the company is ready to support best practices in oil palm research and development to support highest yield production.

The plan, according to him, is to scale-up oil palm production and increase the capacity of smallholder farmers, many of who struggle to achieve industry average yields.

Inyang maintained that the country could quadruple its production if oil palm producers were trained on best management practices.

According to him, the market potential for oil palm is very huge and can replace crude oil if the government is ready to give the commodity the same attention given to crude oil and cocoa production in the country.

Akahi News Recommends This Source Link For Details

Advertisements

Links: 1. OAU School of Nursing 2. OAU JUPEB 3. OAU Pre-Degree 4. OAU Post-UTME 5. NYSC Registration Centres 6. School of Nursing Past Questions 7. Questions from JAMB-Sweet Sixteen 8. Latest School News 9. Download Latest Music 10. Call Akahi Tutors - 08038644328

Advertisements