Ghana will displace Ivory Coast to become the lead exporter and earner of palm oil production in West-Africa for the next five years, according to Bloomberg and Fitch Solutions.
Ghana’s palm oil production will increase by an average of 4.4% year-on-year from 2021 to 2025, with the growth rate increasing at the end of that period.
“A number of recent establishments of both industry and government bodies to regulate and support the Ghanaian palm oil industry have improved the potential of the national sector compared with other countries in the region”, the report emphasized.
Already, the Ghana Export Promotion Authority and the Ministry of Trade are seeking to develop a palm oil surplus, from which they estimate $134 million could be earned within the next 10 years through exports.
The report added that “the Oil Palm Development Association of Ghana (OPDAG) was revived in 2015, and is currently being supported by Solidaridad in a strategic plan to improve its governance and administration by 2024. OPDAG aims to increase the productivity of Ghana’s palm oil sector, whilst also addressing the challenges of land access (attracting investment by making it easier to acquire new land), trade malpractice (especially smuggling of vegetable oils into Ghana), and sustainability.”
The government also recently provided support for the sector in multiple ways, which Fitch Solutions and Bloomberg believe will incentivize further investment in the coming years.
The establishment of the Tree Crop Development Authority, aimed at improving the policies and programmes set by the government to promote the production of six tree crops, including palm oil, is also a booster.
“Palm oil was excluded from a 50% cut in the benchmark value on imports in 2019 after OPDAG argued that the cut would negatively affect Ghanaian producers. With the New Patriotic Party (NPP) having maintained their rule during the December 2020 election, we expect these policies to continue”, it stressed.
However, despite the recent developments in the Ghanaian palm oil sector, production growth will fail to meet demand growth.
Also, West Africa will not become a major global supplier of palm oil in the coming years, with the top producers remaining in South East Asia.
Source:Goldstreetbusiness.com
