Nigeria palm oil crisis deepens as imports and alleged smuggling drive down local prices, threatening farmers’ incomes and domestic production gains

Nigeria’s palm oil industry, once a global powerhouse, is facing renewed strain as local growers warn that rising imports and alleged smuggling are sharply eroding earnings and threatening recent gains in domestic production, industry sources reported on 26 February 2026.

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Stakeholders say a wave of cheaper foreign palm oil entering through official import channels and porous borders has caused a significant drop in local prices.

The downturn comes at a time when policymakers have been promoting backward integration strategies aimed at boosting local cultivation, processing, and refining capacity.

Historically, Nigeria was the world’s largest palm oil producer before being overtaken by Southeast Asian giants such as Indonesia and Malaysia.

Recent efforts have seen private investors and agribusiness firms expand plantations, modernise mills, and upgrade refineries.

Domestic production now averages approximately 1.4 million metric tonnes annually, but this still lags national consumption of 2.5 to 3 million tonnes, creating a supply gap.

To fill the deficit, Nigeria continues to rely on imports. United Nations Comtrade data indicate the country spent about $154.62 million importing crude palm oil in 2024, with broader annual import bills for palm oil products estimated at up to $600 million.

The influx of cheaper imports has hit local producers hard.

Fresh fruit bunch (FFB) prices the raw material harvested from oil palms have reportedly dropped by around 43%, from N2.8 million per tonne to N1.6 million.

Processed palm oil prices have fallen by as much as 50% in recent months.

Producers attribute the slump to imported oils that benefit from lower production costs or foreign subsidies, undercutting Nigerian growers whose operating expenses are higher.

Representatives of the National Palm Produce Association of Nigeria (NPPAN) called attention to inconsistent trade policies and weak enforcement of existing tariffs, including the 35% duty on crude palm oil, as factors exacerbating the crisis.

The economic impact extends across the value chain. Smallholder farmers, who account for the majority of Nigeria’s production, rely on palm sales for household expenses.

Larger integrated operators are reassessing expansion plans amid uncertain returns.

Industry leaders warn that reduced profitability could lead to job losses, lower rural incomes, and sustained pressure on foreign exchange reserves.

Policy tensions remain a major concern.

While import waivers help moderate consumer prices, overreliance on foreign supply discourages domestic investment and threatens long-term industrial growth.

Nigeria is exploring collaboration with global leaders, including potential engagement with the Council of Palm Oil Producing Countries (CPOPC), to boost output and competitiveness.

Industry stakeholders warn that without clearer trade policy, stronger border controls, and sustained support for local producers, the sector risks reversing years of gradual recovery.

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As global demand for vegetable oils rises, the choices made now will determine whether Nigeria’s palm oil industry regains its former strength or continues under sustained pressure.