Ghana: Domestic palm oil consumption outstrips production

Annual domestic consumption of palm oil has reached approximately 250,000 metric tonnes – far outstripping domestic production levels.

Consequently, the Ministry of Food and Agriculture (MoFA) has announced measures under the Ghana Tree Crops Diversification Project (GTCDP) to tackle the widening gap between production and consumption.

MoFA stresses this imbalance poses both economic and industrial challenges, necessitating targetted interventions to boost output. GTCDP is expected to stimulate production by promoting better seedlings, expanding cultivation and creating stronger market linkages for producers.

Annual production of the crop is estimated at 50,000 metric tonnes – contributing to the country’s huge food import bill currently in excess of over US$3billion. MoFA’s Medium-Term Expenditure Framework (MTEF) 2025-2028 outlines immediate plans to address challenges in the palm oil production value chain.

Under the Framework, government will develop national palm oil industry policy to offer incentives for the growth of palm and developing the palm oil industry’s entire value chain. Government intends providing 1.5 million oil palm seedlings to farmers and encouraging them to actively participate in out-grower palm plantation schemes – dubbed the ‘Red Gold’ initiative.

Early this year around July, the Tree Crops Development Authority introduced new regulations for palm oil imports. The new regulation is partly to curb substandard imports as lots of products coming into the country do so without proper scrutiny, which affects local processors and consumer safety.

Trade data obtained from the Oil Palm Development Association of Ghana (OPDAG) indicate that the country imported some US$1.17billion worth of oil palm between 2019 and 2021. OPDAG notes that domestic consumption will continue to outweigh production if artisanal oil palm millers continue to deploy little or no technology.

This is because these small-scale producers and artisanal millers are not only limited in capacity, but also lack best practices. Notably, a standard palm farm per hectare should give the farmer about 18-25 tonnes of fresh fruit per year; but small-scale producers in the country, according to OPDAG, get less than six tonnes per hectare.

Also, the oil extracting rate should ideally be 20-25 percent per tonne but artisanal millers are doing 11-13 percent. Currently, Ivory Coast is the only net exporter of palm oil on the continent.

Tags: Ghana, consumption, Production, palm oil, crop