Olam’s Response to Inaccurate Reports in the Media over Edible Oils Imports

Proshare

Wednesday, March 14, 2018 3:00PM / Olam 

• No application made for Stearin, Crude Palm Olein and Palm Fatty Acid distillate [PFAD]

• Import request for 25,000 MT of Crude Palm Oil only, less than 1% of total estimated edible oil consumption and 2.5% of edible oils deficit. 

Olam’s journey started in Nigeria in 1989 and today we employ over 7,000 people, having invested over $1 billion to support economic diversification and domestic food security. We depend very much on Nigeria’s farmers - a procurement network of approximately 500,000 farmers stretches across the country, supporting rural livelihoods and providing access to market for cash crops including rice, cocoa, cashew and sesame. Through our animal feeds facilities we are also catalysing the production of soybean and corn from around 150,000 Nigeria farmers. Given the importance of farmers to our operations, we are therefore highly concerned about allegations suggesting our actions will harm the livelihoods of palm oil producers.  We believe this is due to a misunderstanding of the facts, particularly regarding the amount of crude palm oil imported by Olam - just 1% of Nigeria’s edible oil deficit. 
 

The Facts
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 (1 million MT).  To achieve self-sufficiency, domestic production of palm oil would require a minimum of 250,000 hectares of mature plantations. This would take 5 – 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 tonnes 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
[1]. 

Over the past 3 years, Olam has therefore facilitated imports of approximately 12,000 MT Crude Palm Oil per annum (approximately 1% of total estimated deficit) all of which is produced and supplied by a single supplier based in Cote d’Ivoire, paying applicable duties. 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.
 

In terms of application for future supply, we have only applied for an import license of Crude Palm Oil (CPO) at 35,000 MT initially, which has only been revised downward to 25,000 MT by concerned authorities, i.e., less than 1% of total estimated edible oil consumption. Contrary to media reports we have not applied for Stearin, Crude Palm Olein and Palm Fatty Acid distillate [PFAD].
 

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.
 
 

NB:
Edible oils and fats are a major source of energy and essential fatty acids and the human body requires dietary fats and oils in sufficient amounts to carry out basic metabolic functions. They provide essential fatty acids [EFA], as their name defines, are absolute essential nutrients required by the body. Inadequate consumption of edible oil and fats may results in the deficiency of these essential nutrients leading to malnutrition and serious metabolic derangements with subsequent manifestations like night blindness, osteoporosis, bleeding from skin and mucosa, dry skin (phrenoderma), and susceptibility to other infections.  

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