Nigeria palm oil industry has an intriguing history, being the dominant global producer in the early 1960s with a staggering 43% market share. However, there has been a shift in recent times. In 2018, Nigeria had slipped to the third position, producing palm oil on approximately 2.3 million hectares (5.7 million acres) of cultivated land. However, this transformation signifies Nigeria’s firm dedication to rejuvenating the sector. Nigeria, once serving as a global powerhouse, now finds itself positioned as the fifth largest producer in the world, a ranking it has maintained for over half a decade.
With its current contribution to the global production of around 74.08 million metric tonnes (MT) being less than 2% (equivalent to 1.4 million MT), the country falls behind production leaders such as Columbia (1.8 million MT), Thailand (3.3 million MT), Malaysia (19.2 million MT), and Indonesia (45.5 million MT). Notably, oil palm fruit stands out as an incredibly efficient crop, surpassing all other vegetable crops in terms of oil yield per land area. The oil palm fruits yield a varying rate of oil extraction, typically falling within the range of 17-27%.
About $20 billion could have been generated from the sector.
Palm oil is of great importance within Nigerian economy, as it is not only utilized for cooking oil due to its high carotene content, but also a crucial resource in the production of detergents, soap, margarine, confectionery, and bakery trade. The oil also serves as a valuable additive in animal feed, making a significant contribution. The versatile oil offers a harmonious blend of vital nutrients, constituted by about 50% saturated fat, 40% unsaturated fat, and 10% polyunsaturated fat. This unique composition not only ensures balance but also contributes to its immense worth across various arenas, including household consumption and industrial usage, due to its adaptability.
The Central Bank of Nigeria (CBN) asserts that if Nigeria had sustained its position as the top player in the palm oil sector, the nation would presently be generating an estimated $20 billion each year from palm oil cultivation and processing. Despite a decade of increased of the oil production in Nigeria, there has been little effect on domestic consumption or the country’s standing in the global market. Production levels surged steady over the years: 890,000 MT in 2015, progressing to 990,000 MT in 2016, rising further to 1.03 million MT in 2017. The upward trend continued with 1.13 million MT in 2018, and finally peaked at 1.14 million MT in 2019.
Consumption of the oil rose to 1.7 million metric tons in 2022.
Based on the data, Nigerian palm oil production had an average of 1.4 million metric tonnes in both 2021 and 2022, while in 2020, it stood at 1.3 million MT. By 2023, palm oil production in Nigeria had reached 1.4 million metric tons. Throughout the period from 2009 to 2023, the production quantity generally witnessed an upward trend, with the most substantial growth occurring in 2010 at an approximate rate of 14%. Starting in 2014, there was a noticeable upward trajectory in the productivity of the oil. Nigeria, boasting of over 200 million population, has an annual intake of approximately three million metric tons of fats and oils.
A research conducted by PricewaterhouseCoopers, a globally auditing firm, unveiled that the oil constituted about 45% of the overall consumption in 2018. The United States Department of Agriculture reported that Nigeria, in particular, held the title for the largest consumer of the oil on the African continent, having consumed 1.4 million MT in 2018. As of the 2021/2022 crop season, Nigeria’s palm oil consumption skyrocketed to an impressive 1.7 million metric tons. The farm product’s soaring consumption over the past decade has reached its pinnacle, signifying its significance as a prominent crop within the nation, meeting a rising demand within the local market.
Importation of the oil rose to 518,000 metric tons in 2013.
The majority of the oil finds its purpose in industries, with a smaller fraction being utilized in households. However, despite the rate of production, Nigeria experienced a significant surge in the oil imports. In 2018 alone, Nigeria imported a total of 350,000 metric tons of the oil, signifying an escalation in import volume when juxtaposed with the three years prior. In 2013, 518,000 metric tons of the oil was imported, marking the highest point during the observed period. Even more interestingly, recent data from Statista in 2018 reveals that Nigeria secures the 6th spot amongst African nations in terms of the oil export volume.
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