The Tree of Life

Palm tree have been credited to be the princess of the vegetable kingdom. It is a nature’s gift to the world. At least one product can be extracted from almost every component of the palm tree. It is one of the most fruitful trees in the world.

Values such as crude palm oil, palm kernel, pharmaceutical products, palm wine, broom, palm seedlings, soaps and cosmetics, vegetable oil, fatty oil, furniture etc. are products that can be derived from oil palm trees.

The tree thrives in tropical, sub-tropical or desert climates. Over the last three years, Indonesia topped the rank as the highest producer and exporter of oil but Malaysia has a stronger history as it has occupied the top position for decades. Nigeria is the fifth Oil Palm producing and exporting country in the world.

Facts about Oil Palm                
An interesting fact to note is that Palm oil is the most traded oil in the world.  In 2011, a report by Malaysia Palm Oil Board, a premier government agency under the Ministry of Plantation Industries and Commodities reads that “in 2011, Malaysia’s export of palm oil rose to 17.99 million tons, after reaching a high of 16.66 million tons in 2010”. The same report reads that Nigeria recorded 1 million tons production and 700,000 tons export.

The Present State of Global Oil Palm
The Financialist reported on May 9th, 2013 that “the world is hungry for palm oil, but as the biggest producer countries run out of viable land for planting palm trees, the production landscape is shifting”. Further in the report, they stated that “...Global demand for vegetable oils has been growing steadily by 3 to 4 percent a year for the last 30 years, Tan said. Malaysia currently accounts for 39 percent of global palm oil production and 44 percent of total exports, according to the Malaysian Palm Oil Council. But global demand for palm oil has been growing at an 8-percent-a-year clip, Tan says, and the cheapest oil by bulk has taken market share from other types of vegetable oil. The vast bulk of palm oil is used for food, especially as cooking oil.”

Why Entrepreneurs and Investors should be interested in Oil Palm
1.      There is an increasing demand for vegetable oil. The consciousness for healthy living is a huge area of emphasis today. Nigeria has witnessed an explosive importation of vegetable oil which now comes in various shapes, sizes and packages. This awareness for health spells market for the oil palm industry. The truth is that this trend will go on.
2.      Another key reason why it is an area to pay attention to is because the key players are running out of space to plant more palm. Countries like Malaysia, Indonesia that are leading in oil palm production and exportation cannot boast of the land mass that Nigeria possess. As of 2011, the total planted area of oil palm tree in Malaysia was 4.917 million hectares. Little wonder they are running out of space. Nigeria sits on a large expanse of land; all it needs are investors and smart entrepreneurs who will take advantage of the current situation to increase its volume of palm plantation which will boost its production and exportation. If much attention is paid to this sector, it will jumpstart the national GDP.
3.      There has been an explosive involvement of government and private sectors in the agro sector. Grants, loans, incentives are now available and easily accessible to entrepreneurs and investors who are willing to invest in agriculture. The ground is wet, the time ripe to dip into the oil palm industry.

Palm oil producers such as Okipupa Oil Palm Plc, Okomu Farms, Nifor and other small scale farmers have all contributed to making Nigeria a success in the global scene, but the time for mediocrity is long gone. The time for Nigeria to up her game in the global oil palm industry is now.

The Way Forward
There are several niches to dip into in the sector.
Nursery practice is one aspect to dip into, palm oil, vegetable oil and palm kernel oil is another area to invest in. exportation of palm kernel is yet another lucrative area. Processing even these palm kernels into cosmetics is another huge business yet to be explored.

Production and refinement of oil palm products is the way forward for Nigerian investors. In Malaysia, exportation of vegetable oil contributes 13% of the GDP. Nigeria can share similar story if the sector is well structured.

Written by
Ryta Moemeke