Nigeria Allocates More Land for Palm Oilseed Planting
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FAS Lagos (Post) forecasts Nigeria’s Palm kernel Oilseed production in marketing year (MY) 2023/24 (January-December) to reach 1.1 million metric tons (MMT), up by about 22 percent compared to the USDA official MY 2022/23 estimate of 900,000 MT. Area harvested in MY 2023/24 is forecast to reach 3.2 million hectares, up by 7 percent from the USDA official MY 2022/23 estimate of 3 million hectares. This increase in harvested area is due to the growing domestic demand for Palm kernel Oil in food processing and growing private sector investment.
There is also an increasing Government intervention in allocating lands to investors for Palm kernel plantations. The increased flow of investment leads to greater adoption of improved planting materials, good agronomic practices, and better harvesting techniques. Post estimates average yields in MY 2023/24 at 0.3438 MT/hectare. The demand for Palm kernel Oil has risen over the years following its diverse use in foods, consumer products, and biofuels.
Nigeria’s Palm kernel consumption is to reach about 1.1 million metric tons (MMT) in MY 2023/24, up 22 percent – compared to the USDA official MY 2022/23 estimate of 904,000 metric tons (MT). Nigeria is increasing consumer-oriented processed food products by utilizing Palm kernel extracts in new products, especially in confectionary and bakery products. More importantly, urbanization and rising income levels are increasing the demand for packaged foods with high Palm and Palm kernel Oil content.
The country’s growing population and income levels significantly impact Palm kernel consumption. Nigeria’s population accounts for half of West Africa’s population. Over half of the country’s population lives in urban areas (urbanization is growing at 4 percent annually). Currently, half of Nigeria’s population is under 19 years old. Fast foods, street foods, and snacks are common in the diet of young Nigerians. In addition, consuming bakery products is seeing robust growth in cities nationwide.
Palm kernel stocks are forecast at 5,000 MT in MY 2023/24. Nigeria’s Palm kernel imports are projected at 3,000 MT in MY 2023/24, a 25 percent decrease below the MY 2022/23 USDA official estimate of 3,000 MT. A fall in imports is due to rising global prices and increasing domestic supply. Nigeria imports Palm kernels from Malaysia, Ghana, Indonesia, and Cote D’Ivoire. The country is an insignificant Palm kernel Oil exporter – this trend will continue.
Palm Kernel Meal in Nigeria
In MY 2023/24, FAS Lagos forecasts Nigeria’s Palm kernel Meal production at 568,000 metric tons (MT), up 20 percent compared to USDA’s official MY 2022/23 estimate of 472,000 MT – the increasing demand for industrial use is resulting in more private sector investment in better crushing/ processing equipment. Large industrial millers like Presco and Okomu Plc produce considerable quantities for the livestock and feed sectors. However, small-scale operators dominate the industry resulting in lesser throughput.
FAS Lagos forecasts Nigeria’s total Palm kernel Meal consumption in MY 2023/24 at 548,000 MT, up by 20 percent above the USDA official MY 2022/23 estimate of 457,000 MT. Demand for Palm kernel cake continues to grow – to meet the needs of livestock and feed sectors that consider it a cheaper alternative amid soaring prices of maize, soybean, and other feedstocks.
Palm kernel cake (PKC) is an alternative ingredient for raw materials such as corn and soybean Meal in the formulation of poultry feeds. Including PKC in the poultry diet benefits poultry farmers – exceptionally, as high feed prices pose a significant threat to the poultry industry. Poultry feed experts recommend using 15 to 25 percent PKC components in formulating poultry feeds. Consequently, the government of Nigeria endorsed PKC as an alternative raw material for animal feeds. Feed millers seek to reduce production costs by increasing PKC use in feed formulation for the ruminant industry.
Other sources: USDA
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