Nigeria’s oil palm production soars amid increased appetite

Nigeria’s palm kernel oil seed production in marketing year (MY) 2021/22 (January-December) is expected to hit 900,000 metric tonnes (MT), a 23 per cent increase compared to an estimated 730,000 metric tonnes recorded the previous year (MY 2020/21).

The rise in production, according to a Global Alliance for Improved Nutrition (GAIN) report facilitated by the United States Department of Agriculture (USDA), is attributed to an expansion in area harvested by the primary producers, spurred by the increasing demand for palm kernel oil in the West African country.

Spurred by a rising supply of raw materials to processing industries, Nigeria’s palm kernel crush is estimated at 900,000 metric tonnes, representing 23 percent increase from the previous year’s estimates, while the extraction rate is forecasted to jump over 8 percent to 0.488, compared to the MY 2020/21 extraction rate of 0.452 per metric tonnes.

Market reports also noted a growing private sector investment in production of palm kernel for oil, with manufacturers like Dufil, Nigeria’s leading noodle producer/major oil refiner, and PZ Wilmar, Singapore-based palm oil producer, partnering with local oil palm farmers who have formed massive palm kernel plantations notably in Edo and Cross River states.

Currently, Nigeria’s palm kernel oil production is set at 440,000 metric tonnes, 33 per cent (about 110,000 metric tonnes) above the USDA official MY 2020/21 estimate of 330,000 metric tonnes. The positive figure, according to industry watchers, is attributable to private sector investors improving oil extraction efficiency by upgrading to more modern crushing and extraction equipment and machinery.

The report also stated that the fifth largest palm oil producer in the world will consume nearly all its produced palm kernel oil within the period under review, a 29 percent rise in consumption rate compared to the previous seasons’ rate of 100,000 metric tonnes.

Food use consumption is forecasted to rise approximately 320,000 metric tonnes, up almost 28 percent compared to the previous marketing year’s volume of 250,000 metric tonnes. On the other hand, a third of the production is expected to go towards industrial use, where it serves as a fuel for biomass plants.

Palm kernel meal production, regarded as a by-product, has been projected to reach 493,000 metric tonnes, 23 per cent or 93,000 metric tonnes above 400,000 metric tonnes produced the previous marketing year. Nigeria is increasing appetite for palm kernel meal as consumption is set to rise by 34 per cent to 538,000 metric tonnes from 400,000 metric tonnes.