Ghana: Palm Kernel Crushing to Grow 37%
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Ghana was the first country to produce Palm Oil for export, and some of the technology which originated in Ghana for this purpose was later utilized in Malaysia and Indonesia. Ghana’s first international commercial trade in Palm Oil occurred in 1820, the direct result of demand generated by the industrial revolution in Europe, making Palm Oil the country’s principal export. Although the world’s Palm Oil price declined in the 1870s and the country could not produce competitively, Palm Oil accounted for 75% of export revenue by the 1880s. Since gaining independence from Britain in 1957, successive Ghanaian governments have continually promoted Oil Palm as an industrial crop for local consumption and export.
There have been several attempts to promote and revitalize the Palm Oil sector in Ghana since the 1950s, but most of these have either stalled or failed altogether. The most prominent has been the Presidential Special Initiative (PSI) on Oil Palm launched in 2002 by John Kufour of the National Patriotic Party (NPP), the party currently in power. Kufour envisioned—as part of the PSI—that smallholder Palm Oil production could significantly alleviate rural poverty and that Ghana was well placed geographically and economically to re-develop a viable export industry for Palm Oil.
Oil Palm production in Ghana—primarily cultivated by smallholders (60%+)—plays a vital role in local economies and rural livelihoods. As a multi-functional crop, it is embedded in the everyday life of rural and urban Ghanaians, both in individual households and on an industrial level.
The USDA forecasts Ghana’s Palm Oil area harvested at 390,000 hectares (HA) in marketing year (MY) 2023/24, representing a marginal increase of one percent from Post’s MY2022/23 estimate of 385,000 HA. Expected expansion of farms, especially by smallholders, in response to recent rises in domestic prices of fresh fruit bunches (FFB) and kernels induced by the high global prices of Crude Palm Oil (CPO) and Crude Palm Kernel Oil (CPKO) is responsible for the change.
Ghana’s MY2023/24 Palm kernel production is forecast at 85,000 metric tons (MT), up by 37 percent compared to Post’s MY2022/23 projection. Favorable weather forecasts and favorable fertilizer prices compared to the preceding years are expected to result in relatively higher FFB yield and kernel yield. Artisanal Palm Oil producers are the leading suppliers of kernel nuts to the artisanal kernel processors. Kernels are sold either in truckloads or in sacks depending on the quantity. A 100 kg sack of kernels now sells for GHȼ80.00 ($6.84) at an exchange rate of $1.00=GH11.70. The market shares of the industrial scale and the artisanal kernel processors are estimated at 30 percent and 70 percent, respectively.
Fertilizer supply has improved, but the price remains relatively high due to the depreciation of the local currency (the cedi) against the dollar. It is expected that a bailout from the International Monetary Fund (IMF) would help bolster the cedi’s performance against the major trading currencies and bring prices of fertilizer on the domestic market further down. This will induce increased fertilizer usage, which will impact production. Accordingly, Post has raised the yield forecast for MY2023/24 by 35 percent to 0.2179 MT/HA, compared to Post’s current year’s (MY2022/23) projection of 0.1610 MT/HA.
Palm Kernels Crush in Ghana
Post forecasts MY2023/24 crush at 85,000 MT, an increase of 37 percent compared to the preceding year’s estimate. Post’s forecast for MY2023/24 total domestic consumption is the same as the crushing value. Industrial-scale Oil mills that do not process kernels sell the kernel nuts to others that process at an industrial scale or to artisanal kernel processors. According to AgFlow data, Ghana imported 25,750 tons of Palm Oil from Malaysia in Jan-May 2023.
Other sources: FRONTIER SIN
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