Cameroon: the emergency need to boost local palm oil production

After peaking at 180,000 tonnes in 2023, Cameroon’s palm oil imports will hover around 225,000 tonnes for the next six months of 2024. This is an unprecedented import volume for the country, which has always imported between 100,000 and 70,000 tonnes of palm oil, despite the sector’s deep structural deficit.

The increase in this structural deficit, of over 160,000 tonnes, is the consequence of an exponential increase in investment in processing over the last 10 years, while production of the raw material has virtually stagnated. As Emmanuel NKoulou Ada, Chairman of the oilseed industry regulatory commitee often reminds us,

“The structural deficit we often talk about is a nominal deficit, which is different from the real deficit. This nominal deficit is calculated on the basis of 50% of the capacity of processors. On the basis of processors’ actual capacities, the deficit is actually much greater.

Hovering between 350,000 and 400,000 tonnes each year, national palm oil production is struggling to meet local demand. The production capacity of the 2nd transformation industries is around 500 tonnes per day.  This is the more true given that production has fallen drastically in recent days. Local production has seriously dropped in recent days”, admits Jacquis Kemleu, Secretary General of Asroc. He adds that

“you can’t meet a demand of over a million tonnes with a production of just under 400,000 to 500,000 tonnes and import 200,000 tonnes, thinking that’s a lot.

For the association of oilseed refiners of Cameroon (ASROC in french), these imports are necessary to keep prices unchanged on the national market. The price of 25,500 Fcfa for a 20-liter drum, in force since December 2023, and 1,500 Fcfa per liter, has been “maintained”, despite high international prices. At the close of trading on July 9, a tonne of palm oil was trading at $869, a variation of +1.24% per day, and +3.14% per month.

The government’s unconvincing recovery plan

In response to the glaring structural deficit in local palm oil production, the government has announced a stimulus package worth around US$36 million (FCFA 21.7 billion) to support the development of palm oil production over the period 2024-2026. The funding will subsidize equipment for three primary processing agro-industries (CDC, Socapalm, Pamol).

The aim is to bring them up to standard, and even to replace their processing units in order to increase yields. However, this funding may not have the desired effect, given the current socio-political situation in the areas where some of these agro-industries are located. A situation which is partly responsible for the current drop in production by these agro-industries. And to this day, the socio-political instability responsible for this situation persists.

Also announced is support for the acquisition of modern processing equipment for cooperatives, the regeneration/rehabilitation of 5,000 hectares of village and agro-industry plantations, and the construction of new oil extraction units.

However, the government seems to be turning a deaf ear to the proposal from industries in this sector to benefit from land access facilities to plant oil palm themselves and boost local palm oil production. ASROC members are lobbying in this direction. They point out that such facilities have benefited countries such as Gabon, currently a palm oil exporter, but which a few years ago was still a palm oil importer. The other reason for hope for the sector could also be the Inter Palm-Cam interprofession, created in December 2023, which would like to play a crucial role in increasing palm oil production, both in quantity and quality, to meet the needs of the processing industries.