Description

Nigerian agriculture is characterized by considerable regional and crop diversity. Analysis of this sector, particularly the food sub-sector, is fraught with serious data problems. However, the available statistics provide a broad overview of development in agriculture upon which we can make some broad generalizations about its role in economic development and structural change in Nigeria.

In the 1960s, the agricultural sector was the most important in terms of contributions to domestic production, employment and foreign exchange earnings. The situation remained almost the same three decades later with the exception that it is no longer the principal foreign exchange earner, a role now being played by oil.

The sector remained stagnant during the oil boom decade of the 1970s, and this accounted largely for the declining share of its contributions. The trend in the share of agriculture in the GDP shows a substantial variation and long-term decline from sixty percent (60%) in the early 1960s through forty-eight point eight percent (48.8%) in the 1970s and twenty-two point two percent (22.2%) in the 1980s. Unstable and often inappropriate economic policies (of pricing, trade and exchange rate), the relative neglect of the sector and the negative impact of oil boom were also important factors responsible for the decline in its contributions.

On its diversity, Nigerian agriculture features tree and food crops, forestry, livestock and fisheries. In 1993 at 1984 constant factor cost, crops (the major source of food) accounted for about thirty percent (30%) of the Gross Domestic Products (GDP), livestock about five percent (5%), forestry and wildlife about one point three percent (1.3%) and fisheries accounted one point two percent (1.2%).

Until the late 1970’s when hydrocarbon was discovered in commercial quantity in Oloibiri, present day Bayelsa state, Agriculture remained the mainstay of the economy contributing over ninety percent (90%) of the Gross Domestic Product (GDP) of the country as against the less than forty percent (40%) it now contributes with crop production accounting for an estimated eighty-five percent (85%), livestock ten percent (10%) and the balance made up by fisheries and forestry.

Oil palm in Nigeria grows in the coastal belt which varies in depth from one hundred to one hundred and fifty (100 to 150) miles and a riverine belt which follows the valleys of the Niger and Benue for a distance of about four hundred and fifty (450) miles from the sea. The main palm oil producing states includes Ogun, Ondo, Oyo, Edo, Cross River, Anambra, Enugu, Imo, Abia, Ekiti, Akwa-Ibom, Delta and Rivers.

Palm oil forms an important part of the local diet in Nigeria because animal fats such as milk and butter are hardly consumed. It is used both as a cooking material and as an ingredient in soups, sauces and a variety of local dishes. The product is also needed for the industrial production of soap and confectionaries.

Consequently, there had long been a thriving market for palm oil both within the main areas of production in eastern and western Nigeria and between these regions and the non-palm oil producing northern region.

This report seeks to examine the financial viability or otherwise of establishing a palm oil trading company in Nigeria.

It is estimated that the busines would sell one hundred (100) HDPE containers of twenty-five (25) litres of palm oil weekly. The price of palm oil is seasional.

The demand for Palm Oil is high in Nigeria. Consumption of palm oil cuts across social, religious, age in Nigeria in general because it is consumed every day in almost every home in Nigeria mainly for cooking purposes.

It is also used in cooking during social engagements which is a common occurrence in Nigeria, especially during weekends. Some of the factors which have influenced the demand for palm oil in Nigeria include growth in per capita income, increase in population, and increase in number of fast food joints, restaurants and hotels and the growth in the national economy over the years.

There is therefore an enormous demand for edible palm oil. Research revealed that per capita consumption of palm oil in Nigeria is about 1.5 Litre/annum.

Therefore, the estimated demand in Nigeria is about 1,600,000 metric tons /annum. To meet the demand in Nigeria, palm oil is imported most especially from Asian countries like Indonesia, Malaysia and Singapore.