Malaysia, importers move against Nigeria’s palm oil market


…As FAO wants $1.06bn to assist 26 countries to boost local food production — Report***

A report by Agro Nigeria has alleged that there is a conspiracy against Nigeria’s palm oil sector.

The report specifically fingered the Malaysian government’s decision to suspend export taxes on crude palm oil for three months from January this year.

The move, according to government sources in Kuala Lumpur, is aimed at reducing the CPO stocks level accounted for by surplus production that has now outstripped export demands.

This is expected to have an adverse effect on the oil palm industry in Nigeria as imported oil will become cheaper than the locally-produced oil, thereby forcing local oil producers out of the market and a takeover of the market by importers and smugglers.

The report stated, “The concern of stakeholders in Nigeria is that beyond the current year’s surplus production from Malaysia, some of which would find their way into the country, what would be the fate of the surplus production expected from plantation farms across Malaysia at the start of next year?

“Much of the surplus looks set to be sent to Nigeria. The Plantation Owners Forum of Nigeria had accused businessmen of setting up refineries in countries close to Nigeria in order to use them as channels through which rejected oil from other parts of the world especially Malaysia is exported to Nigeria.

“It appears that there is a conspiracy by both the importers and smugglers of the commodity to kill local production while flooding the market with imported oil. Should government watch hopelessly and helplessly while this very important subsector of the agricultural sector is annihilated?”

The agency observed that in the past few years, there had been an increase in the production of the commodity in the country with moribund oil palm plantations being revamped, smallholder planting established far beyond the traditional oil palm belt to include the fringe states such as Kogi, Kaduna and Nasarawa.

It noted however that there was a controversy over Nigeria’s production figures, adding, “While Index Mundi puts Nigeria’s production at 970,000 tonnes annually (a figure that has stagnated for 11 years), available data from the Plantation Owners Forum of Nigeria put domestic and industrial demand for palm oil in the country at 2.8 million tonnes annually with production at 1.8 million tonnes.

“This leaves a production shortfall of about one million metric tonnes – a deficit, which ordinarily should be balanced off by imports.”

According to Agro Nigeria, the lack of agreement on production data has led to rising concern among industry players that more quantities of the commodity than the actual shortfall were either imported or smuggled into the country through land borders, a factor that has made the country a dumping ground for crude palm oil from Asian countries, especially Malaysia and Indonesia.

In the meantime, the UN Food and Agriculture Organisation (FAO) says it will need 1.06 billion U.S. dollars to assist over 30 million people in 26 countries to improve local food production in 2018.

A report by FAO in Abuja on Friday appealed to donor agencies to renew their support in 2018 to the organisation so as to enable it to assist the people to fight hunger and revive agriculture-based livelihoods.

The report indicated that the assistance would come through the provision of seeds, tools and other materials for crop farming, while safeguarding livestock production through lifesaving veterinary care.

Others are organising trainings on improved crop production and processing, land and water management as well as well as provision of cash to families to enable them to have immediate access to food.

The report also said that the humanitarian appeal would focus on assisting crisis-affected and vulnerable persons in the 26 countries.

The countries include Yemen, where 5.7 million people would be reached and others are the Democratic Republic of Congo and in South Sudan, where 2.8 million people and 3.9 million people respectively would be reached.

It said that the countries would benefit from the 2018 emergency livelihood support scheme of FAO.

“The reality is that while the lives of millions of people were saved — thanks to rapid humanitarian response in 2017 — millions more remain on the very edge of starvation.

“Maintaining food production and rebuilding agriculture are fundamental to preventing loss of life from severe hunger and providing a pathway towards resilience in the midst of humanitarian crises.

“This is why FAO focuses on transforming vulnerability into resilience, so that when something bad happens, families are able to cope and feed themselves.

“With conflict and climate-related shocks sending global hunger numbers marching back up after declining for decades, FAO is asking for 1.06 billion U.S. dollars to save lives and livelihoods and address acute hunger in 26 countries,’’ the report said.

Analysing the assistance given to some countries in 2017, the report said that FAO provided seeds, equipment, fertiliser and training which empowered over six million people in Nigeria, Somalia, South Sudan and Yemen.

It said that 43 million animals in the countries, mainly cattle, goats and camels, received veterinary care, feeds and water, thereby allowing millions of pastoralist and livestock-dependent families to feed themselves and remain self-sufficient.

“Some two million poor, high vulnerable families benefitted from FAO cash transfers (adding up to 42 million U.S. dollars in total).

“These payments helped the people to avoid selling off household seeds, animals or other assets to buy food and helped them to resume agricultural production, especially in the crisis-affected areas,’’ the report added.

Additional report from Citizen