Nigeria’s growing appetite for palm kernel oil, meal set to propel production rate

NIGERIA – Nigeria’s palm kernel oilseed production in marketing year (MY) 2021/22 (January-December) is expected to reach 900,000 metric tons (MT), up by 23 percent beyond the MY 2020/21 estimate of 730,000 metric tons.

The rise in production, according to a GAIN report by USDA, is attributed to the rise in area harvested as the primary producers have been encourage by the increasing demand for palm kernel oil in the country.

Currently, there is growing private sector investment in production of palm kernel for oil, with manufacturers like DUFIL, a leading cooking oil refiner, and a major noodle maker in the country and PZ Wilmar, Singapore-based palm oil producer, partnering with local growers forming massive palm kernel plantations in Nigeria’s Edo and Cross River State.

With sufficient supply of raw materials to the industries, Nigeria’s palm kernel crush during the period under review is estimated at 900,000 metric tons MT, up 23 percent from the previous year’s estimates.

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The extraction rate in MY 2021/22 is forecasted to increase more than 8 percent to 0.488, compared to the MY 2020/21 extraction rate of 0.452 per metric ton.

Nigeria’s per capita consumption of edible oils stands at 12.5 kilograms

This is attributable to private sector investors improving oil extraction efficiency by upgrading to more modern crushing and extraction equipment and machinery.

Overall, Nigeria’s palm kernel oil production is set at 440,000 metric tons MT, up over 33 percent or some 110,000 metric MT above the USDA official MY 2020/21 estimate of 330,000 metric tons (MT).

The country will consumer nearly all the produced palm kernel oil i.e., 440,000 metric tons (MT), up almost 29 percent or some 100,000 metric tons MT compared to the previous seasons’ rate.

Food use consumption is approximately 320,000 MT, up almost 28 percent compared to the previous marketing year’s volume of 250,000 metric tons.

About a third of the production will go towards industrial use, where it serves as a fuel for biomass plants.

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Produced as a by-product, palm kernel meal production is forecasted at 493,000 metric tons (MT), up 23 percent or 93,000 MT above 400,000 metric tons (MT) produced in 2020/21.

Nigeria has a growing appetite for palm kernel meal as consumption is set to rise by 34% to 538,000 metric tons from 400,000 metric tons.

Nigeria’s per capita consumption of edible oils stands at 12.5 kilograms compared to world average of 20 kilograms. The country has the potential to become a significant market for oilseeds, oil meals, and oils for domestic and industrial consumption.

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