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Business News of Tuesday, 27 October 2015

Source: B&FT

Poor rainfall raise concerns over oil-palm fruit yields

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A lack of continuous rainfall across the major oil-palm-growing belt in the country has raised fears among farmers and industry officials that the crop could be facing poor yields, which will widen the annual national production deficit of 35,000metric tonnes.

An estimated total land area of 305,758 hectares is cropped to oil-palm, with a production level of under 300,000m/t. The country’s local demand is estimated at 295,000 metric tonnes for its manufacturing industry as well as for local consumption.

“This year we have very little rain, unlike Nigeria and Cote D’Ivoire which had normal rain. And this will obviously affect crop yields. Less rain means less production.

“Oil-palm is happy when it has its feet in water and its head in the sun, then it is given you the best yields; that is the reason why Malaysia and Indonesia are doing double or triple tonnage per hectare compared to some West Africa nations.

“This is because we always have dry seasons, and always we have clouds and never see the blue sky,” said Gert Vandersmissen, Managing Director of the Ghana Oil Palm Development Company (GOPDC) in an interview with B&FT.

He explained: “If you have these two factors every day, a little bit of rain and the sun all the time shining, it provides the best photosynthesis and ensures best crop growth. We don’t have these two factors here; every time we have sunshine but rain is lacking, if this continues it will affect yields”.

Mr. Vandersmissen blamed deforestation as a major cause of the continuous drought along the oil-palm growing areas in some West African countries including Ghana: “There is a dry season and it is not new; but because of deforestation in the area, it is raining less and less”.

He observed that Africa imports about 4 million metric tonnes of palm-oil annually, while it can be grown locally even if the conditions are not favorable -- adding that it is still interesting to grow oil-palm in West Africa.

Africa, which holds 30 percent of all oil-palm agricultural lands, regrettably produces less than 10 percent of the total world production of palm oil -- with Ghana contributing a distant below-1 percent (0.8 percent).

In the West Africa sub-region, the total crude palm-oil market demand stands at approximately 1.6 million m/t -- with Nigeria producing about 500,000m/t while Ghana’s production hovers around 135,000m/t, with Cote D’Ivoire producing 600,000m/t.

The Food and Agriculture Organisation (FAO) has predicted that world production of palm-oil is expected to increase from 45 million tonnes to about 60 million tonnes by 2020.