Global Palm Oil Crunch Hits Nigeria: Import Costs Soar Over $500m Annually

Nigeria’s dependence on palm oil imports is driving up costs as global prices hit record highs. Supply constraints from Indonesia, the world’s largest producer, and rising crude oil prices for biodiesel are squeezing global availability. With crude palm oil trading near $1,160 per ton, Nigeria must import over 500,000 metric tons yearly. At an annual import bill of $500m to $600m, this shortfall is fueling food inflation and straining household budgets. Indonesia’s push for higher biodiesel blends and export taxes, along with adverse weather and El Niño effects, could cut its output by up to one million tons in 2026. Meanwhile, local producers like Presco Plc and Okomu Oil are expanding capacity, but experts say boosting domestic yields remains critical to close the gap. Nigeria once supplied over 40% of the global market in the 1960s. To curb rising costs, the country must improve farming systems, expand plantations, and reduce reliance on imports.

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