Ghana to become a major oil palm producer

An oil palm Master Plan which will boost the nation’s competitiveness in the global commodities market and meet the local demand is being developed by the Ministry of Food and Agriculture, B&FT has been told.

The Master Plan will focus on access to financing, certification, land-use policy, technology transfer, and infrastructure development from the farm to the port, as well as pricing mechanism and marketing.

The policy document will seek to outline set of projects and programmes to be executed within the next 15 years and will become the blue print for the sector’s growth. This is aimed at maximising development outcomes for the communities while supporting smaller businesses, as well as alleviating poverty.

Government has up-to-date spent 2.4 million euros on the oil palm project and is expected to commit additional one million euros on its production by close of 2010.

Mr. Joseph Baidoo-Williams, Head of Tree Crops Development Unit, Ministry of Food and Agriculture (MOFA) in an interview with B&FT in Accra said: “This would make it very easy for the nation to attract donor support to enhance palm oil production.”
The country currently requires about 295,000 metric tonnes of palm oil both for its manufacturing industry and for local consumption.

Last year oil palm processing groups projected a production output of 260,000 metric tonnes of palm oil. This indicates a deficit of 35,000 metric tonnes.

The nation spends US$100 million annually on the importation of oil palm to compensate for the deficit.

Approximately, 305,700 hectares of oil palm plantation is being cultivated nationwide and an additional 20,000 hectares of oil palm farm is needed to meet the local demand.

Current forecast suggests the ECOWAS sub regional market is being faced with an unmet demand of up to one million metric tonnes.

Trade analysts say the strategy is timely as Ghana is expected to export 36,000 metric tonnes of palm oil to China next year, following the conclusion of a US$21.6 million deal between Chyuan Chya Ghana Limited and China-Africa Economic Trade Limited.

The oil palm to be exported by Chyuan Chya will mainly be purchased from small and medium-scale smallholder producers across the country.

Mr. Baidoo-Williams disclosed that government is supporting the cultivation of 3,000 hectares of small holder farms in the Twifo Hemang Lower Denkyira and the Upper Denkyira and that 1,000 farmers have been supported in these two districts to cultivate 2,300 hectares of farm.

He explained that Twifo Oil Palm Plantation has been contracted by MOFA as the technical operators. The company is also expected to purchase the fruits and provide extension services to the farmers.

“Government provides financial support in the form of loans to farmers for maintenance, fertilizers and planting materials. The loans to farmers are channeled through National Investment Bank of which the repayment starts after five years,” Mr. Baidoo-Williams said.

The rising trend in international demand has been precipitated by increasing demand for palm oil for bio-fuel purposes.

Crude Petroleum Price determinants continue to push upwards pressure on the price, and demand for Crude Palm Oil (CPO) is steadily rising in India, China, Europe and the America for bio-fuel. In view of this development, investors have been diverting their investment portfolios into CPO.

Ghana’s major producers, Benso Oil Palm Plantation (BOPP) and Twifo Oil Palm Plantation (TOPP), Ghana Oil Palm Development and Norpalm, a Norwegian firm turn out around 80,000 tonnes per annum as against 90,000 tonnes demanded by Unilever alone.