Oil palm products-smuggling on the rise

The Oil Palm Development Association of Ghana (OPDAG) has said incidents of oil palm products-smuggling into the country is intensifying despite several complaints made to designated authorities.

President-OPDAG, Samuel Avaala, told B&FT that smugglers have been using unapproved routes while others take advantage of the ECOWAS Trade Liberalisation Scheme to perpetrate the vice.

“Last year, the president designed a policy to combat oil palm smuggling into the country from Togo through various entry points in the Upper East and West Regions. Unfortunately, the policy is not being enforced,” Mr. Avaala indicated.

The Association estimates that the economy loses US$40million annually from finished oil palm products being smuggled into the country.

The smuggled products, once they hit the market, are priced cheaper as all taxes and duties on them are evaded, OPDAG said. This affects local manufacturers and creates an unfair trading field that benefits only the smugglers.

Mr. Avaala said if urgent action is not taken by authorities, many jobs will be jeopardy – including out-grower farmers, as local producers will be forced to significantly cut down or at worst shut-down operations.

“Customs must enforce the policy that has been designed to halt smuggling, and this must be done in collaboration with all district security checkpoints across the country. It is one of the surest ways to curb ongoing smuggling and give value to local producers,” he identified.

Ghana is the third-largest producer of palm oil in West Africa after Nigeria and Ivory Coast. Domestic consumption of palm oil in refined form is about 300,000 metric tonnes per annum valued at GH¢1.3billion.

Current local production stands at about 120,000 metric tonnes, whereas imports stand at 150,000 metric tonnes per annum valued at US$271million.

With local demand estimated to increase, players are calling on government to support the sector so the industry can utilise its full potential to support the economy.

The local oil palm industry employs about 50,000 people directly at plantation level.

Key challenges of the sector, apart from the smuggling menace, include small-scale producers being in charge of more than 70 of percent production.

This challenge is further exacerbated by the fact oil extracting and processing is also largely done by small artisanal millers.

With little or no use of technology in the sector, the oil extracting rate is lower and waste contains fibre content higher than in the actual oil extracted.

However, the OPDAG has been advocating intensification to increase current production levels by at least 50 percent.

The Association insists ensuring adoption of best practices at the farm and mill level should be prioritised.