Data from the Oil Palm Development Association of Ghana (OPDAG) has disclosed that Ghana imported approximately $1.17 billion worth of oil palm from 2019 to 2021.
Despite having the potential to become a net exporter, the country has rather become a net importer of oil palm as it shipped in $1.17 million metric tonnes of palm oil from 2019 to 2021 while producing about 850,000 tonnes within the same period. This revelation has led industry experts to question why the country has not maximized its capacity for production of oil palm.
The Association’s President, Mr. Samuel Avaala during an interview expressed the belief that the lack of best practices in palm oil’s production and milling is causing the state to lose millions of export revenue from the commodity.
Though Wilmar Africa and the Benso Oil Palm Plantation refine and produce crude palm, these two companies, as indicated by Mr. Avaala, export a chunk of their products to the Sahel regions and other parts in the sub-region.
Refining almost 1000 metric tonnes per day, both Wilmar and Benso export about 600,000 tonnes in both refined and crude palm each year to countries including Mali, Burkina Faso, Niger, and others.
With domestic consumption of palm oil hovering around 400,000 tonnes, Mr. Avaala is of the view that priority should be given to domestic production to reach two million tonnes annually to reduce the weight of imports on the economy, and to create employment for young people.
According to the Association’s President, Indonesia and Malaysia currently produces more than 90 percent of the world’s consumable palm oil.
More so, data from the OPDAG showed that Africa consumes 13 percent of global palm oil but produces just about four percent of the commodity.
“We need to cultivate about 200,000 hectares to meet the targeted expansion and to halt the escalating imports.”
Mr. Samuel Avaala
OPDAG Calls On Government To Support Small Artisanal Millers
According to Mr. Samuel Avaala, the key challenge to domestic production is that small-scale producers are in charge of more than 70 percent of production. Similarly, oil extraction and processing are largely done by small artisanal millers.
With little or no use of technology in the sector, he noted that oil extracting rate is lower, and waste contains fibre content higher than the actual oil extracted, adding that: “These small producers and artisanal millers are not only limited in capacity, but they also lack best practices.”
For instance, a standard palm farm per hectare should give the farmer about 18-25 tonnes of fresh fruits per year, but small-scale producers in the country, according to the OPDAG, get less than six tonnes per hectare.
Whereas the oil extracting rate should ideally be 20-25 percent per tonne, artisanal millers are doing 11-13 percent. This presents an opportunity for the government and other stakeholders to work with small-scale producers and artisanal millers to improve the efficiency of the sector.
“Intensification must be done to double the current production to at least 50 percent. Adoption of best practices at the farm level and at mills should be prioritised.”
Mr. Samuel Avaala
In Africa, Nigeria used to be the leading palm oil producer but abandoned it after it discovered oil. Currently, Ivory Coast is the only net exporter of palm oil in Africa. This shows that Ghana has a lot of potential to become a significant player in the palm oil industry.
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