No long introduction and beating about the bush. Why is it that the price of vegetable oil imported from Singapore and Malaysia is half price of the palm oil being produced in south eastern Nigeria? We complain that "big men" are unjust, what about the masses who are being unfair to themselves. Ordinarily, it's the price of the imported "groundnut oil" that should have been twice that of palm oil due to high prices of dollar. So, my eastern brothers and sisters, what's happening? Why has Palm oil suddenly become gold. This is so dis-heartening. Nigerians, why are we doing this to ourselves?

Scarce and very expensive.

This is so disgusting. What excuse can we give for this artificial hike?

Erngie:
Scarce and very expensive.

My sister, and the painful part is that it's all artificial. There's no real cause for the scarcity! It's like cabal made up of producers coming together to practice this heist and defrauding Nigerians and maybe to further cast the present government in bad light.

Exactly, very artificial. I'm not sure it's planned, it might be because of the Cost of processing it now since everything has trippled it's price

Daviddson:
My sister, and the painful part is that it's all artificial. There's no real cause for the scarcity! It's like cabal made up of producers coming together to practice this heist and defrauding Nigerians and maybe to further cast the present government in bad light.

Erngie:
Exactly, very artificial. I'm not sure it's planned, it might be because of the Cost of processing it now since everything has trippled it's price

But why should it double the price of the imported competitor, vegetable oil? How does the dollar rate affect the production? Machines? Do they buy new machines everyday or week or month or year?

Lol. the people that process it now charge double because they'll have to buy rice and other things which are now very expensive. I am not justifying their hike in price, i'm just thinking

Daviddson:
But why should it double the price of the imported competitor, vegetable oil? How does the dollar rate affect the production? Machines? Do they buy new machines everyday or week or month or year?

It's because Nigerians are wicked and insensitive to themselves

I will tell you why


It is a case of dog eat dog


I interviewed a woman a while back, I asked why red oil has gotten more expensive since they work on plantation, manually produce the oil and stuffs basically with zero input, most palm trees are local not agric, tapping and converting, even if it was agric palms, there shouldn't be too much cost involved in making oil


She said ko si obo ni idanre


Meaning : No fools anywhere


When I asked what she meant, she said she was visiting relatives in Ibadan, enroute Lagos, she stopped by the roadside to buy more oil for relatives,especially since she planned to visit the north, she was perplexed when she was told how much a keg is being sold, almost 3rice the price they sell on farm


She said it was worst in Lagos as the price was quadruple the amount they sell to people who buy from them


Meaning some people bought a keg around 12,000 and were selling for almost 40,000 , so they held meeting and reviewed the price especially since everything else's price has increased


So, let me ask you is it the local producers or the resellers?


Same principle applies for rice, at at yesterday a bag of rice still sells for 7,500 in Cotonou Nigeria's major rice supplier even if it's smuggled , how come a bag is 17+?
Is it custom duty or haulage fees?


People who rush up and down on all threads to insult Buhari lack wisdom, they follow follow and troll and that's why I always pick a fight with them


We are the ones killing ourselves with greed

Erngie:
Lol. the people that process it now charge double because they'll have to buy rice and other things which are now very expensive. I am not justifying their hike in price, i'm just thinking

And is rice still increasing in price? When was the last time you heard about a single naira increment?

No mechanized system of production while palm plantation are growing with the speed of demand... You may also like to note that while dams and irrigation are built to help produce more of other stables, nothing of such happens for palm plantations. Most of the oil you get are actually from wild palm trees..

owobokiri:
No mechanized system of production while palm plantation are growing with the speed of demand... You may also like to note that while dams and irrigation are built to help produce more of other stables, nothing of such happens for palm plantations. Most of the oil you get are actually from wild palm trees..

My brother, what's your point exactly?

THEOffset:
This is so disgusting. What excuse can we give for this artificial hike?

Excessive rainfall in the SE/SS last year.

The palm tree needs cool cloudy conditions to fruit usually around July -August m-September.

Daviddson:
My brother, what's your point exactly?

Hmmm.., lemme try again; I don't think it is artificial.. I mean the price hike. The cost is also high even in the villages. I think it is pure market realities. Production is not meeting up with demands. . I tried explaining to you why that is so... Palm oil production in Nigeria has not been fully mechanized. Doing so will help quicker production of bigger quantity.. I also think that people who produce this buy other costly commodities in the market and may have decided to add those costs to their produce. Add that to the fact that it is being exported these days..

I was actually discussing this issue with my wife one day sometimes in December last year. We couldn't agree to any reason in particular but fortunately for me, I stumbled on this piece in The Punch of December 10 2016. This will give some insight.

Why is palm oil very expensive now?

There is more demand for it and what we are producing is far lower than what we need. Even if those going back to agriculture plant now, it will still take three to four years before they start fruiting; there is no magic about it. And the demand is increasing. Now if you want to import, it is difficult to get forex to do that. So some of the companies that need palm oil to make margarine and so on now have to source for it locally so that they can buy in naira instead of importing from Malaysia. And also, it is seasonal and we are in off-season now. Maybe between February to July/August (its season), next year, the price will go down. But at this moment, it is scarce. People need it for food and raw materials and there was nothing to store up when it was in season.

In the interview by an oil palm researcher and investor in mechanisation of palm oil production, Charles Aladewolu, he said that Nigeria produce 40% of palm oil while the rest 60% was imported. However, due to forex scarcity, the industries using palm oil as raw materials made incursion into the local production, hence the spike in its price.

http://punchng.com/shameful-nigeria-imports-palm-oil-aladewolu/

Daviddson:
My sister, and the painful part is that it's all artificial. There's no real cause for the scarcity! It's like cabal made up of producers coming together to practice this heist and defrauding Nigerians and maybe to further cast the present government in bad light.

It had to be about Making the present government look bad abi?

That means the government is weak, incompetent and ineffective. They should use their power to better the lot of Nigerians.

owobokiri:


Hmmm.., lemme try again; I don't think it is artificial.. I mean the price hike. The cost is also high even in the villages. I think it is pure market realities. Production is not meeting up with demands. . I tried explaining to you why that is so... Palm oil production in Nigeria has not been fully mechanized. Doing so will help quicker production of bigger quantity.. I also think that people who produce this buy other costly commodities in the market and may have decided to add those costs to their produce. Add that to the fact that it is being exported these days..

Ideal Climatic factors during the fruiting stage were not met.

The palm tree requires a period of low rainfall during the rainy season characterised by overcast cloud conditions and light intermittent drizzle.

The rains where consistently heavy and mostly convective.

Last year was an El Nino year.

The poor yield from what I can gather was that the palm failed in fruiting last year.

Simple. Demand and supply.

Our yearly requirement:2 million tonnes
Our Production Capacity: 900,000 tonnes.
That's a shortfall of 1.1 million tonnes.

Palm Oil is a long term crop requiring nearly 7 years to reach full maturity.Any strategy to promote local production would have to be a long term sustainable one. Most of our Palm trees are aging and enough quantities of new stock aren't being planted.

The production shortfall can only be met by imports in the short to medium term.

Any attempt to stifle Palm oil supply is a death kneel to manufacturing. Probably 70% of food, detergent & cosmetic production has palm oil inside. Palm oil use is more industrial than domestic.

The two largest producers of Palm oil in Nigeria, Okomu & Presco have thier supplies paid for in billions till 2018 by the likes of Indomie, Nestle, Unilever. Everything has Palm Oil in it. Everything.

The government should lift the ban on Palm oil imports as we cannot suddenly start producing enough Palm oil no matter what we do in the next 5 years.

owobokiri:


Hmmm.., lemme try again; I don't think it is artificial.. I mean the price hike. The cost is also high even in the villages. I think it is pure market realities. Production is not meeting up with demands. . I tried explaining to you why that is so... Palm oil production in Nigeria has not been fully mechanized. Doing so will help quicker production of bigger quantity.. I also think that people who produce this buy other costly commodities in the market and may have decided to add those costs to their produce. Add that to the fact that it is being exported these days..

Kai... Things don't still add up. Why suddenly? Anyway thanks for your thoughts.

PapaBrowne:
Simple. Demand and supply.

Our yearly requirement:2 million tonnes
Our Production Capacity: 900,000 tonnes.
That's a shortfall of 1.1 million tonnes.

Palm Oil is a long term crop requiring nearly 7 years to reach full maturity.Any strategy to promote local production would have to be a long term sustainable one. Most of our Palm trees are aging and enough quantities of new stock aren't being planted.

The production shortfall can only be met by imports in the short to medium term.

Any attempt to stifle Palm oil supply is a death kneel to manufacturing. Probably 70% of food, detergent & cosmetic production has palm oil inside. Palm oil use is more industrial than domestic.

The two largest producers of Palm oil in Nigeria, Okomu & Presco have thier supplies paid for in billions till 2018 by the likes of Indomie, Nestle, Unilever. Everything has Palm Oil in it. Everything.

The government should lift the ban on Palm oil imports as we cannot suddenly start producing enough Palm oil no matter what we do in the next 5 years.

We can't be importing everything for goodness sake.
Local production will be discouraged with the lifting of ban on importation.

OAUTemitayo:
We can't be importing everything for goodness sake.
Local production will be discouraged with the lifting of ban on importation.

This is the problem. You are being ignorant & unrealistic just like the government we have in power. Even if you plant 1 billion palm trees today, you would not produce a single liter extra of palm oil in the next 4 years. But your population is going to keep adding 5 million new children yearly and you know what: they are going to be needing more indomie noodles and more baby food and more bathing soap.

In 4 years, that's 20 million new people needing palm oil that's already scarce today. Only two things would happen: the price would get incredibly high beyond the reach of the consumer class and those companies would have no choice but to shut down thier factories and move them to Ghana & Ivory Coast from where they would export the finished products to Nigeria.

The sad reality with mindsets like yours is that you would never invest in a single palm tree and tie your money down for 6 years before you start getting returns. But you would keep complaining that we are importing.

I repeat, if there is no strategy that includes imports albeit with high tariffs for the short term, land use reforms, smart support solutions for farmers in the medium term and hardcore research in the long term, then all you'd get is continued increase in prices and eventual collapse of the food, detergent & cosmetic manufacturing sector and ultimately more and more imports of everything .

PapaBrowne:


This is the problem. You are being ignorant & unrealistic just like the government we have in power. Even if you plant 1 billion palm trees today, you would not produce a single liter extra of palm oil in the next 4 years. But your population is going to keep adding 5 million new children yearly and you know what: they are going to be needing more indomie noodles and more baby food and more bathing soap.

In 4 years, that's 20 million new people needing palm oil that's already scarce today. Only two things would happen: the price would get incredibly high beyond the reach of the consumer class and those companies would have no choice but to shut down thier factories and move them to Ghana & Ivory Coast from where they would export the finished products to Nigeria.

The sad reality with mindsets like yours is that you would never invest in a single palm tree and tie your money down for 6 years before you start getting returns. But you would keep complaining that we are importing.

I repeat, if there is no strategy that includes imports albeit with high tariffs for the short term, land use reforms, smart support solutions for farmers in the medium term and hardcore research in the long term, then all you'd get is continued increase in prices and eventual collapse of the food, detergent & cosmetic manufacturing sector and ultimately more and more imports of everything .

You really don't know who you are talking about.
I have some 3 hectares of palm oil trees that I manage (family possession not mine).
I intend buying more lands after my graduation.
You people just like throwing accusations around.
I know more on palm oil than you.
The government must not listen to economic saboteurs like you who want to make millions importing everything.

Daviddson:
No long introduction and beating about the bush. Why is it that the price of vegetable oil imported from Singapore and Malaysia is half price of the palm oil being produced in south eastern Nigeria? We complain that "big men" are unjust, what about the masses who are being unfair to themselves. Ordinarily, it's the price of the imported "groundnut oil" that should have been twice that of palm oil due to high prices of dollar. So, my eastern brothers and sisters, what's happening? Why has Palm oil suddenly become gold. This is so dis-heartening. Nigerians, why are we doing this to ourselves?

its not hard to understand...

its to beat the locals and get monopoly...

if you dare fall for the trap as soon as your local producers die out,they will hike the price up..and you would have no other choice than to buy from them...

singapore doesnt have palm product..soo,how can they sell cheaper then??...they have intensions.. thats why..

OAUTemitayo:
You really don't know who you are talking about.
I have some 3 hectares of palm oil trees that I manage (family possession not mine).
I intend buying more lands after my graduation.
You people just like throwing accusations around.
I know more on palm oil than you.
The government must not listen to economic saboteurs like you who want to make millions importing everything.

dont mind am..

we should start teaching economics already in primary schools..

nigerians have no idea of economics...

buhari was right to say dont devalue...

when you import more than you export thats called trade deficite..

import doesnt make your market grow...

OAUTemitayo:
You really don't know who you are talking about.
I have some 3 hectares of palm oil trees that I manage (family possession not mine).
I intend buying more lands after my graduation.
You people just like throwing accusations around.
I know more on palm oil than you.
The government must not listen to economic saboteurs like you who want to make millions importing everything.

Good to know you have hectares you are inheriting. That's impressive. But just like I said, that is old stock and if they are above 20 years they are probably part of the aging stock with declining production. And like I said, you probably haven't planted a single tree yet so you don't know what it takes to make an investment and wait 6 years to start getting your first returns.

Now you have 3 hectares out of about 3.5 million hectares planted in Nigeria. That means we need another 1 million of you to plant this year alone for us to be able to harvest our 2017 needs in 2024.

Now where will you see 1 million of you who are willing to wait 7 years to begin to reap thier investments?? And if by some miracle we find them, who will give them the land to plant. And if they get the land, wouldn't they just rather plant Cassava that would grant them returns in 1 year?

To meet the kind of demand we have, we need the likes of hundreds of Okomu, Presco and Wilmar to cater for industrial consumption while smallholders can handle the domestic palm oil consumption.

By the way, I'm both a farmer and a manufacturer. The increase in price of oil had terribly affected our manufacturing business to the point of a temporary shutdown but We are tenacious so came up with a solution where now make our own oil which many other companies wouldn't have the luxury of doing. Just to let you know I'm speaking from a place of experience.

Imports with tariffs would not affect local production in any way as long as there is no dumping.

It's called demand and supply. If palm oil supply is sufficient and demand drops , then it the price should drop. Me I enjoy soy bean oil, that's what we should be consuming

It is all scam...Nigerians reaping off their fellow Nigerian...

Wow well said comments people.

There is quite some truth in what most people here have said.

1. Some of what we produce is usually locally consumed.
2.What is produced is usually stored for periods when price goes high.

"A case in point of this was in December when keg prices hit 25k and above from previous 17k November and early December. And there was so much surplus in the markets”

3. Some of what is produced is also being exported. Currently there are listed and active palm oil exporters with NEPC

4. Packaged palm oil was imported from some parts of west Africa.

5.The most glaring truth is that market reality and inflation currently affecting Nigeria.

Plantation owners and mill operators are seeing the raise in prices of other commodities I.e Garri hitting N50 a cup and rice now hitting a high of 28k a bag.

Given those condition and the fact that they have to exchange oil to get funds to buy those foods that are now priced higher.

They in turn are forced to hike prices.

Hopefully this current inflation rate in the country slows down soon, else the circle may just keep going.

Brian
The Palm Permutations
http://the-ahamefulas.com

Due to lack of dollar, industries now use locally made palm oil instead of imported ones, thus, making it less available for domestic use

razid:
I was actually discussing this issue with my wife one day sometimes in December last year. We couldn't agree to any reason in particular but fortunately for me, I stumbled on this piece in The Punch of December 10 2016. This will give some insight.


In the interview by an oil palm researcher and investor in mechanisation of palm oil production, Charles Aladewolu, he said that Nigeria produce 40% of palm oil while the rest 60% was imported. However, due to forex scarcity, the industries using palm oil as raw materials made incursion into the local production, hence the spike in its price.

http://punchng.com/shameful-nigeria-imports-palm-oil-aladewolu/

e tire me my brother