Why the price of palm oil is rising – Farmers

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Palm oil growers have attributed the high cost of palm oil to supply shortages, Indonesia’s palm oil export ban and lack of government support resulting in low production.

Talk with Daily trust on Sunday, one of the farmers in Edo State, Peter Agwele, said many factors are responsible for the high cost of palm oil.

“It is demand and supply that change the prices of items, including palm oil. So basically, when the demand is high and the supply is not enough, the price will definitely go up.

According to him, once you have a shortage of supply, there will probably be an increase in prices, adding that demand is greater than production.

“The other factor is also the Russian-Ukrainian war which has put pressure on almost everything from edible oil to gun oil.”

He explained that Nigeria was a net importer of palm oil and when Indonesia banned the export of palm oil to other parts of the world, it badly affected Nigeria in terms of price.

He said Edo State is involved in a palm oil expansion program by partnering with private investors and the Central Bank of Nigeria (CBN) to be able to increase plantations and boost the production.

He noted that 60-70% of the plantations are owned by small-scale farmers who he said are unable to attract funds from government and financial institutions, adding that they depend on personal funds to to grow plantations, which is not always enough.

Harrison Okpaluwa, another farmer, attributed the high cost of palm oil to the high dollar rate which he said affects all other commodities.

“Oil palm has required huge investments to improve the plantation and the local labor to do it is very expensive,” he said.

He said the only way for government to intervene is to formulate policies and make them work, saying policy implementation remains an issue affecting palm oil production in Nigeria.

“A lot of policies are made by the government, but there is no follow through and there is little or no help from the government like in other countries to encourage smallholder farmers,” he said. added.

He lamented that the Edo State government is encouraging big farmers at the expense of small farmers, noting that the Central Bank of Nigeria and loan officers are not helping matters. He said if the government could put in place policies to facilitate loans so that small farmers can access loans for their expansion, things would change.

“Once small farmers have access to credit, production will increase and the price will decrease.

“Nigeria is a capitalist country. Farmers are shouting, “Lend us, we will pay back” but they prefer to give political farmers to enrich their pockets.

“If the production improves, the price will go down but as long as the demand is higher than the production, the price will always remain high.”

Daily Trust on Sunday learned that depending on the market, a 20 liter palm oil jerrycan sells for between 21,000 and 23,000 naira in most southern states.

The price is higher in the northern states as the same 20 liter jerrycan costs between N27,000 and N30,000 depending on the state.

The same 20 liter was sold this time last year for N18,000-20,000 in the north and much less in the southern states.

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