Ghana Can’t Produce Enough Palm Oil to Feed its Industries

Ghana is heavily dependent on palm oil imports to feed its industries, sourcing around 70% of its palm oil needs from countries like Malaysia, Indonesia, and neighboring Ivory Coast as well as Liberia. In 2022, Ghana imported $202 million worth of palm oil, making it the 48th largest importer globally.

However, local manufacturing companies are struggling to keep up with rising import costs due to the cedi’s depreciation, which has led to reduced importation, low production, staff layoffs, and an increase in the price of cooking oil and products dependent on palm oil.

The government‘s prohibition on importing palm oil by road has further strained the supply, as shipping the product increases costs. This has caused a noticeable rise in the price of essential goods like cooking oil and soap. Consumers are increasingly buying smaller quantities of oil from gallons rather than sealed bottles to save costs.

Historically, Ghana was once a major exporter of palm oil, with countries like Malaysia learning from Ghana’s oil palm sector. Today, the country relies on imported industrial palm oil, with only small quantities of edible palm oil produced locally and exported to a few countries. A large percentage of the palm oil produced by small-scale processors cannot be utilized by the larger scale industries in Ghana or abroad because of its poor quality.

If the current economic conditions persist, more companies in the palm oil-dependent manufacturing sector could be forced to shut down due to the high cost of imports and limited profitability, threatening jobs in the process.

Meanwhile, the companies are also grappling with constant smuggling of vegetable oil to the country through unapproved routes by some traders depriving the local producers of over 600,000 metric tonnes of vegetable oil production monthly.

-thehighstreetjournal.com