NIGERIA – Malaysia, the world’s second- largest producer of the Palm Oil has offered Nigeria 100% duty exemption on crude palm Oil (CPO) export from July till December 31, 2020 to replenish declining stock and surge in demand post-Covid-19, coupled with decline in the international price of the commodity.
The move is part of efforts to enable the buyers ferry about 295,000 metric tonnes of the produce valued at N77.06billion (US$171.24million) at a reduced price of US$580.50 per metric tonne, reports New Telegraph.
According to the Malaysian Palm Oil Council (MPOC), the duty exemption will provide Malaysian palm oil exporters advantages over other exporting countries.
Indonesia, the largest producer of the item, still sells its CPO at US$657.73 per metric tonne.
The Federal Government of Nigeria had banned importation of the produce but ever since the prohibition, importers still bring palm oil into the country.
The Central Bank of Nigeria had planned to encourage investment by offering low interest loans to farmers for oil palm cultivation and erecting barriers on crude palm oil imports. However, importers have continued to slight the order.
Findings from Malaysian Palm Oil Board (MPOB)’s export statistics indicate that between January and May 2020, Nigeria imported 113,000 metric tonnes of palm oil mostly in the form of CPO/palm olein.
This volume was about 13.2 per cent lower compared to the same period last year because of Coronavirus pandemic.
The council explained that in the last five years, the average Nigerian palm oil import was 1.31 million tonnes per year, noting that average import was about 240,000 tonnes per year, giving Malaysia a market share of about 18 per cent.
Besides Malaysia, Nigeria also imported a substantial amount of palm oil from Indonesia and from neighbouring West African countries such as Benin, Togo, and Ivory Coast.
However, the palm oil council explained that despite the present condition, with low stock, high demand and very competitive palm oil prices, Nigeria would import more palm oil.
In a report on Nigerian palm oil market, MPOC explained that the major factors, which drive the palm oil usage in Nigeria, included the level of customer demand provided by the growing Nigerian population and the international price of CPO.
It added: “A decline in the international price of CPO always leads to increased imports of palm oil, as well as smuggling from neighbouring West African countries.
“Despite paying an import duty of 35 per cent, Nigeria importers are not discouraged to import more palm oil from Malaysia and Indonesia as the demand is always there and imported palm oil is still cheaper than locally produced palm oil.”
It added that Nigeria would require annually 2.34 million metric tonnes (MT) of vegetable oils and fats to meet the domestic requirement for food and non-food uses, saying that Nigeria is the largest consumer of oils and fats in sub-Saharan Africa and the biggest importer of Malaysian palm oil from the region.
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