The Palm Oil (CPO) sector is currently facing a significant challenge, due to restriction on inter-state movement and smuggling of the produce, despite closure of all land borders.
The Chairman, Okomu Oil Palm, Gbenga Oyebode, who said this during the company’s 40th Annual General Meeting (AGM) reports and accounts presentation for the year 2019, held in Lagos, said 2019 was dominated by the immense surge in illegal imports of olein, which led to the log jamming of all sectors of the oil palm pipeline for nearly two quarters.
Oyebode added that this, together with the USA/China trade war and the increase in import duties by India, the largest importer of palm oil in the world, caused a drop in the world market prices for CPO, which resulted in immense difficulties for the company to sell her CPO into the local market at this period.
“In order to mitigate this problem to some extent over this time, the company resorted to processing around 10,000t of her CPO into olein, which at least enabled her to hold her stock for a longer period than it had remained as CPO, because of CPO’s propensity for degrading faster than olein.”
As far as operational performance of the company was concerned, Oyebode hinted that as at end of 2019, total oil palm area was 19,060 ha, out of which, 1,883ha were immature.
“No replanting took place in 2019, but 181ha of palm was newly planted in Extension 2, which completed the total area to be cultivated on this plantation. Total agricultural palm plantation costs for the year were 11 per cent higher than for 2018.
“Costs of CPO production from the oil mill were two per cent higher than 2018’s production, due to increased preventative maintenance costs, whilst oil extraction rates averaged approximately 22.19 per cent, this being around three per cent higher than for the same period 2018. Total book costs for all oil palm products were up two per cent, which were better than the inflation.”
Oyebode added that for the year 2020, the company would be involved in partnerships with Non-Governmental Organisations (NGOs), and would endeavor to initiate an oil palm smallholder programme, together with the Edo State Government in order to increase the company’s CPO production through the purchasing of fresh fruiting bunches from them, whilst also concurrently improving the lot of small-scale growers.