Nigeria's palm oil imports from Malaysia increased by 505% in the first quarter.

Despite a federal government push to increase local production, Nigeria's Crude Palm Oil (CPO) imports from Malaysia, the world's top producer, increased by 505 percent in the first quarter of 2023, according to data from the Malaysian Palm Oil Council (MPOC).

According to the data, the country's CPO imports from Malaysia increased to 63,788 metric tonnes (MT) in the first three months, January to March, from 10, 536 MT in the same period in 2022, an increase of 53, 252 MT year on year.

The country imported 227,035 MT of crude palm oil from Malaysia in 2022.Nigeria’s Palm Oil Imports From Malaysia Rises  By 505% In Q1

To boost local crude palm oil production, the federal government listed crude palm oil on the 41 items restricted from forex access.

Similarly, to protect the country’s palm oil industry and spur the industry growth, the Nigerian government had imported a 35 percent tariff (10 percent duty and 25 percent levy) on palm oil imports into the country.

Despite this, oil palm imports into the country are still on the rise owing to the huge demand-supply gap.

Nigeria’s palm oil output is estimated at 900,000-1.3 million MT, experts say. Import is estimated at over N500 billion annually. With national demand of 2.1 million MT, the supply gap is around 800,000MT.

Experts stated that palm oil imports have continued to rise because Nigeria’s CPO has remained less competitive than the imported ones owing to high production costs among others.

According to them, this makes local manufacturers who use CPO as raw material for production result in importing rather than patronising local producers.

“Since the inclusion of CPO in the country’s import prohibition list, Nigeria has significantly increased its production in the last 10 years,” Fatai Afolabi, executive secretary of the Plantation Owners Forum of Nigeria, said in a statement last year.

“But Nigeria is still importing a lot of CPO into the country and many are smuggled through the land borders,” Afolabi said.

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