Palm oil imports rises above $1bn in 2 years
Ghana, a country known for its cocoa production, has imported a substantial amount of oil palm between 2019 and 2021, according to trade data from the Oil Palm Development Association of Ghana (OPDAG). The country imported approximately $1.17 billion worth of oil palm during this period, despite having the potential to become a net exporter of the commodity. This revelation has led industry experts to question why the country has not maximized its capacity for production of oil palm.
The association’s President, Samuel Avaala, believes that lack of best practices in production and milling is causing the state to lose millions of export revenue from the commodity. Despite having two major companies, Wilmar Africa and the Benson Oil Palm Plantation, refining and producing crude palm, they export a significant amount of their products to the Sahel regions and other parts in the sub-region. Refining almost 1000 metric tonnes per day, both Wilmar and Benson export about 600,000 tonnes in both refined and crude palm each year to countries including Mali, Burkina Faso, and Niger. This revelation suggests that there is much more potential for domestic production.
With domestic consumption of palm oil hovering around 400,000 tonnes, Mr. Avaala believes that priority should be given to domestic production to reach two million tonnes annually to reduce the weight of imports on the economy and to create employment for young people. Currently, Indonesia and Malaysia produce more than 90 percent of the world’s consumable palm oil. Data from the OPDAG shows that Africa consumes 13 percent of global palm oil but produces just about four percent of the commodity.
However, the key challenge to domestic production is that small-scale producers are in charge of more than 70 percent of production. Similarly, oil extraction and processing are largely done by small artisanal millers. With little or no use of technology in the sector, oil extracting rate is lower, and waste contains fibre content higher than the actual oil extracted. These small producers and artisanal millers are not only limited in capacity, but they also lack best practices.
For instance, a standard palm farm per hectare should give the farmer about 18-25 tonnes of fresh fruits per year, but small-scale producers in the country, according to the OPDAG, get less than six tonnes per hectare. Whereas the oil extracting rate should ideally be 20-25 percent per tonne, artisanal millers are doing 11-13 percent. This presents an opportunity for the government and other stakeholders to work with small-scale producers and artisanal millers to improve the efficiency of the sector.
In Africa, Nigeria used to be the leading palm oil producer but abandoned it after it discovered oil. Currently, Ivory Coast is the only net exporter of palm oil in Africa. This shows that Ghana has a lot of potential to become a significant player in the palm oil industry.
