Smuggling Threatens Oil Palm Industry

The Oil Palm Development Association of Ghana (OPDAG) has called on government and policy makers to, as a matter of urgency, check the illegalities in the oil palm industry.

According to the Association, imported finished edible oil imports continue to sell in the market far below not only the landing International CIF Tema prices but also local producers prices.

It attributed the development to duty/tax evasion and tax avoidance in the form of under-declaration, under-invoicing, mis-declaration, smuggling, removal in-bond, removal in transit and corruption at entry points.

The Association has therefore called on government to play its supervisory role and ensure adherence to proper duty on import of refined oil products under protective measures or consider outright ban of importation of finished packaged oils that are currently being produced locally as is being done in neighboring countries like Nigeria.

Failure to do this will stifle local production, with a negative impact on the refining industry and a ripple effect down on the value chain, including the farmers and all the suppliers in the value chain, it said.

Samuel Avaala, President of the Association, disclosed this in an interview with the press on behalf of the local manufacturers in Accra on Wednesday after a crunch meeting between representatives of its members, which included Ghana Oil Palm Development Company Limited (GOPDC), Wilmar Africa Ltd, Avnash Industries, Benso Oil Palm Plantation, Oro Oil Ghana Ltd.

Immediate measures to clamp down on import of finished oil through unapproved routes were thoroughly discussed.

Even more worrisome is the fact that imported finished packaged oil has insignificant added values in terms of industrial competence, employment, direct investment, use of local raw materials and a negative development costing the state a whopping amount of money due to tax evasion, Mr. Avaala stated.

The Association, he said, has pursued the formation of the Palm Oil Regulatory Authority to regulate the importation and exportation of palm oil, observing that the oil palm industry in Ghana risks a total collapse if strict prohibitive measures are not taken by policy makers.

Lead facilitator at the meeting, Gangadhar Shetty, Chief Commercial Officer of GOPDC, said in his presentation that the country's palm oil industry has the capacity to meet the local demand, explaining that the existing oil palm refineries in Ghana have a combined capacity of approximately 626,400 m tonnes per annum as against requirement of Ghana's 228,000 per Annum.

“A clear indication that the local manufacturing companies have the ability to cater not only the local domestic demand but are also able to cater to the ECOWAS markets through exports of International quality packed oils, thus bringing in the much needed foreign exchange earnings.

As a result, he noted, there is no basis for the continued importation of finished packed oil into the country.

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By Samuel Boadi