A move by the Central Bank of Nigeria to halt importation of red palm oil is being threatened by Malaysia oil producers as Malaysian Palm Oil Council (MPOC) waived 100 per cent duty exemption on Crude palm Oil (CPO) for Nigerian importers.
The move is part of efforts to enable the buyers ferried about 295,000 metric tonnes of the produce valued at N77.
06billion ($171.24million) at a reduced price of $580.50 per metric tonne. The export duty will however expire
by December 31, 2020.
Indonesia, the largest producer of the produce still sells its CPO at $657.73 per metric tonne.
The Federal government has banned importation of the produce but ever since the prohibition, importers still bring
palm oil into the country. Data by the Nigerian Ports Authority (NPA)’s shipping position revealed that MV Philoxenia has berthed at the Lagos Port complex with 12, 699 at Apapa Bulk Teminal Limited, while MV Gulf Mishref has been moored to offload 25,000 tonnes at ENL Consortium terminal in May 2020.
Also, the shipping data also indicated that Josepdam terminal at Tincan Island Port have taken delivery of 10,000
tonnes from Ardmore Sea Lion.
The CBN had planned to encourage investment by offering low interest loans to farmers for oil palm cultivation
and erecting barriers on crude palm oil imports, however importers have continue to slight the order.
According to MPOC, Nigeria would import more Malaysian crude palm oil in the next few months to replenish the declining stock and surge in demand in post-Covid-19.
Finding from Malaysian Palm Oil Board (MPOB)’s export statistics between January and May 2020, revealed that Nigeria imported 113,000 metric tonnes of palm oil mostly in the form of CPO/palm olein.
This volume was about 13.2 per cent lower compared to the same period last year because of corona virus pandemic.
The council explained that In the last five years, the average Nigerian palm oil import was 1.31 million tonnes per year, noting that average import was about 240,000 tonnes per year, giving Malaysia a market share of about 18 per cent.
However, the palm oil council explained that despite the present condition with low stock, high demand and very competitive palm oil prices, Nigeria would import more palm oil.
Based on global data, the council said that Nigerian palm oil stocks at the end of March 2020 were 100,000 tonnes against the total stock of vegetable oils of 124,000 tonnes, giving palm oil stock at 81.5 per cent of total vegetable
It stressed that the country’s palm oil stock was on the downward trend from a high of 295,000 tonnes at the end of March 2019.
In a report on the Nigerian palm oil market, MPOC explained that the major factors which drove the palm oil usage in Nigeria include the level of customer demand provided by the growing Nigerian population and the international
price of CPO.
It added: “A decline in the international price of CPO always leads to increased imports of palm oil, as well as smuggling from neighbouring West African countries. Despite paying an import duty of 35 per cent, Nigeria importers are not discouraged to import more palm oil from Malaysia and Indonesia as the demand is always there and imported palm oil is still cheaper than locally produced palm oil.”
It added that Nigeria would require annually 2.34 million metric tonnes (MT) of vegetable oils and fats to meet the domestic requirement for food and non-food uses, saying that Nigeria was the largest consumer of oils and fats in
Sub-Saharan Africa and the biggest importer of Malaysian palm oil from the region.