Olam denies applying to import stearin, olein, PFAD
Olam Nigeria has described as inaccurate, reports associating it with making applications to import stearin, crude palm olein and palm fatty acid distillate [PFAD].
The agri-business multinational says it has only applied for an import license of crude palm oil (CPO) at 35,000 metric tons (MT) initially, revised downward to 25,000 MT by concerned authorities.
Palm olein is the liquid portion of palm oil produced after fractionation. It is commonly bottled and sold as cooking oils. The solid fat portion is called palm stearin and it is often used to formulate trans-free fats such as margarine, shortening and vegetable ghee, according to an expert Robin Miller. Similarly, PFAD is produced from refining crude palm oil and is used as raw material for making soap, feeds and chemicals, among others.
In a statement sent by Ade Adefeko, company’s vice president, corporate and government relations, Olam says its CPO application is less than one percent of total estimated edible oil consumption in the country.
Plantation Owners Forum of Nigeria (POFON) recently accused Olam Nigeria of applying to the federal government to import stearin, crude palm olein and PFAD under the West African Trade Liberalisation Scheme (ETLS).
POFON had alleged that Olam was asking to import 95,000 MT of crude palm oil, 50,000 MT of Stearin in bulk, 60,000MT of crude palm olein, and 50,000MT of palm fatty acid distillates, saying that doing that would kill local investors.
Olam, however, says this is inaccurate.
According to Adefeko, Nigeria currently consumes 2.4 million MT of edible oil, but domestically produces only about 1.4 million MT, most of which is palm oil ( one million MT).
To achieve self-sufficiency, he says, domestic production of palm oil will require a minimum of 250,000 hectares of mature plantations, which will take five to 10 years to achieve even with highly optimistic planting / re-planting assumptions.
“In the meantime, therefore, the only way to meet demand requirements (approximately 12.5 kg per person per annum) is to import crude palm oil / crude vegetable oil. (The import of refined palm oil / refined vegetable oil is prohibited in line with most edible oil deficit countries to support local production.) Not importing the 1.4 million tons of crude palm oil would lead to price inflation and have potential health ramifications given that many of the population rely on edible oils for essential fatty acids,” he explains.
According to him, over the past three years, Olam has facilitated imports of approximately 12,000 MT CPO per annum (approximately one percent of total estimated deficit), all of which is produced and supplied by a single supplier based in Cote d’Ivoire, paying applicable duties.
He says government delegates have visited this plantation to assess the production capability to confirm surplus quantity for export.
“To meet our in-house requirements in noodle and biscuit manufacturing, we have also imported a marginal quantity of palm oil, especially during the dry season, when the local availability of palm oil is very restricted.
“Growing responsibly is at the heart of Olam and we believe that it is only by doing business ‘The Right Way’ that we can create long-term sustainable value for us and all our stakeholders. Our business model is built on unlocking value for all parties and Olam is committed to work long-term with people of Nigeria for the betterment of people of Nigeria,” Adefeko says.
He adds that Olam’s journey started in Nigeria in 1989 and has today employed over 7,000 people, having invested over $1 billion to support economic diversification and domestic food security.
ODINAKA ANUDU