Nigeria’s Palm Kernel Oil Production to Grow 33% in 2021/22 – Report

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Okomu Oil Palm kernel oilseed - The year of the Rubber Brandspurng1

Foreign Agricultural Service (FAS) Lagos forecasts Nigeria’s palm kernel oil production in MY 2021/22 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).

Post forecasts Nigeria’s palm kernel crush in MY 2021/22 at 900,000 metric tons MT, up 23 percent or some 170,000 MT from the USDA official MY 2020/21 estimate of 730,000 metric tons.

The extraction rate in MY 2021/22 will increase more than 8 percent to 0.488, compared to the MY 2020/21 extraction rate of 0.452 per metric ton. This is attributable to private sector investors improving oil extraction efficiency by upgrading to more modern crushing and extraction equipment and machinery.

The increased flow of investment is leading to greater utilization of modern harvesting tools and farm equipment – to boost harvesting efficiency. Post sees average yields in MY 2021/22 of 0.3 MT/hectare, largely due to maturing of a new variety of oil palm that is replacing the wild groves, but the effect is marginal due to the presence of high wild groves variety.

Okomu Oil Palm kernel oilseed - The year of the Rubber Brandspurng1

The demand for palm kernel oil has risen over the years following its diverse use in manufacturing artificial cream filings, soap, cosmetic and personal care products. Food processors are increasing the use of palm kernel oil.

To ensure ready, affordable supplies of palm kernel, manufacturers like DUFIL (a leading cooking oil refiner, and a major noodle maker), and PZ Wilmar (Singapore-based palm oil producer), partner with local growers forming massive palm kernel plantations in Nigeria’s Edo and Cross River State.

CONSUMPTION

FAS Lagos forecasts Nigeria’s palm kernel oil consumption in MY 2021/22 at 440,000 metric tons (MT), up almost 29 percent or some 100,000 metric tons MT compared to the USDA official 2020/21 estimate of 340,000 metric tons.

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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.

Nigeria is increasing its production of consumer-oriented processed food products by utilizing palm kernel component for both domestic consumption and for export. Reportedly rising income levels in Asian countries is resulting in increased demand for packaged foods with high palm and palm kernel oil content. Nigerian traders of manufactured food products are increasing exports to markets in Asia and neighbouring countries.

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Palm oil for sale in Sierra Leone.

Nigeria’s population and income level have a significant impact on palm kernel consumption. Nigeria’s population accounts for nearly half of West Africa’s population. More than half of the country’s population live in urban areas (urbanization is growing at a rate of 4.23 percent annually).

Currently, half of Nigeria’s population is under 19 years. Fast-food consumption and snacks occupy a critical part of their diet.