Stemming the tide of rising wave of crude palm oil imports

Stemming the tide of rising wave of crude palm oil imports


Palm oil

Introduction and background
GENTLEMEN of the press, it’s my pleasure to welcome you to this joint press conference of the major palm oil producing associations in Nigeria. I believe we all have read and followed the recent screaming and damning newspaper reports of rising wave of palm oil imports in the country, reminiscent of the situation in 2013.

We also have found it disturbing that detractors are at work again seeking to destabilize the enduring palm oil policy environment and upturn the gains that the Nigerian palm oil industry has recorded in the last 5-10 years.

This press conference is our loud protestation of the looming danger facing the Nigerian palm oil industry if the clandestine and nefarious plots of palm oil traders and speculators are not checkmated.

The Plantation Owners Forum of Nigeria (POFON) is a body of private investors promoting and accelerating investments in plantation agriculture, especially oil palm in Nigeria. Our members include very large oil palm estates and palm oil producers in Nigeria including Okomu Oil Palm Company Plc, Presco Plc, Wilmar, SNL, Aden River Estate, IMC, JB Farms and Agripalm.

The National Palm Produce Association of Nigeria (NPPAN) and the Oil Palm Growers Association of Nigeria (OPGAN) represent the interests of small-scale producers who command about 80% of palm oil production in Nigeria.

Protective Tariff
There is no gainsaying the fact that the current tariff regime of 35% (10% duty and 25% levy) on importation of palm oil and the inclusion of palm oil in the list of commodities that do not qualify for CBN FOREX allocation have been protective of the industry and at the same time the stimulant and tonic for growth.

It has brought about phenomenal growth as witnessed in new plantings and processing capacities across the country. Moribund oil palm plantations have bounced back in production and smallholder planting have spread far beyond the traditional oil palm belt to now include the fringe states like Kogi, Kaduna and Nasarawa states.

We thank and commend government for its steadfastness and tenacity in sustaining these policies in the face of mounting pressure from speculators and rent seekers in the industry.

Falacy of ETLS imports
We have received with shock the clamor by a company who have refused to invest in the Nigerian oil palm value chain to import 95,000 MT of crude palm oil, 50,000 MT of Stearin in bulk, 60,000MT of Crude Palm Olein and 50,000MT of Palm Fatty Acid Distillates under the West African Trade Liberalization Scheme (ETLS). This is not only absurd, it is as well ridiculous as all the palm oil producing countries in West Africa also import crude palm oil into their respective countries.

Importing palm oil from any West African country under the guise of ETLS is tantamount to economic sabotage, while any attempt or plot to import refined products amounts to smuggling because refined vegetable oil products remain on the import prohibition list. It is in this light that we see the ongoing plot by the company as an attempt to procure official stamp to smuggling and commit economic crime against Nigeria.

All available statistics point to the fact that the CPO export data recorded for some West African countries are actually exports into Nigeria from CPO that were imported into those countries. In essence, these West African countries are transit points for CPO destined for Nigeria. By so doing, these countries earn their own duty, whilst they and the Nigerian importers deny Nigeria from earning revenue. This should not be allowed to continue and we say a big NO to ETLS crime.

We also need to expose further the ETLS antics. It is an indirect way of applying for waivers to import CPO and prohibited items. This government has said several times that import waivers will not be granted and we pray that this resolve be maintained.

Killing the palm oil industry
POFON, NPPAN and OPGAN are under no illusion that we are currently producing enough palm oil to satisfy domestic consumption. However, we recognize that to take the oil palm industry to the desirable level, we have to confront head-on the overbearing challenge of lack of competitiveness in the industry. Unmitigated importation and dumping of palm oil in Nigeria will only exacerbate the lack of competitiveness and ultimately kill the industry.

Gentlemen of the press, this press conference is not about posturing, it is about responsibility to the Nigerian economy and the challenge to our palm oil stakeholders to play the game by the rules. Importers, traders and end-users are free to import crude palm oil into the country, but they should please do it legally and pay the duties to Nigeria.

The company in question is also reputed for importing large quantities and poor quality palm oil, with FFA as high as 9-10% into Nigeria, while our members and local producers strive to maintain production of top quality palm oil of FFA as low as 4-5%. This peculiar importation has been seen as one singular factor responsible for the current depression in the domestic palm oil market being experienced by local producers.

Local producers have kept faith with the Nigerian economy and we warn the detractors to apply the brakes. The era of impunity and economic sabotage is over.

Our prayer
We like to call on the Nigeria Customs to commission a forensic audit of all imports including ETLS imports with a view to identifying all those who have used the ETLS to commit economic crime against Nigeria. Where found culpable, they must be made to make refunds to Nigeria customs.

We like to conclude this address with graphical presentations to illustrate the palm oil situation in West Africa and we urge the press to please apply the information and data to be provided to further educate the populace on the Nigerian palm oil economy.

Thank you very much for listening.

Velox 350

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