Required Report - public distribution

**Date:** 1/23/2006

**GAIN Report Number:** NI6001

NI6001

**Nigeria**

**Oilseeds and Products**

**Annual**

**2006**

**Approved by:**

![](media/image1.wmf)Ali A. Abdi, Agricultural Attaché

U.S. Consulate, Lagos

**Prepared by:**

Michael A. David, Agricultural Specialist

**Report Highlights:**

Domestic demand for vegetable oil continues to outstrip supplies by
approximately 300,000 tons. Unofficial sources estimate that Nigeria
imported approximately 200,000 tons despite GON\'s import ban. Local
prices are artificially high and local soap manufacturers are turning to
tallow. Nigeria will require more than 60,000 tons of tallow imports in
CY2006.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Annual Report

Lagos \[NI1\]

\[NI\]

Table of Contents

[Executive Summary 3](#executive-summary)

[PSD Table: Palm Oil 4](#psd-table-palm-oil)

[Price Table: Palm Oil 5](#price-table-palm-oil)

[Production 5](#production)

[Consumption 6](#consumption)

[PSD Table: Palm Kernel 7](#psd-table-palm-kernel)

[PSD Table: Palm Kernel Oil 8](#psd-table-palm-kernel-oil)

[Price Table: Palm Kernel Oil 9](#price-table-palm-kernel-oil)

[Trade 9](#trade)

[Marketing 9](#marketing)

# Executive Summary

Nigeria's overall domestic vegetable oil production in MY2006 is
forecast at 1.35 million tons, up slightly from 1.3 million tons in MY
2005. Consumption demand is estimated at 1.6 million tons, representing
a supply deficit of 300,000 tons. Despite the shortfall, the Government
of Nigeria (GON) continues to implement an import ban on vegetable oil.
Unofficial sources estimate that about 200,000 tons of vegetable oil
were smuggled into the country in MY2005. In addition, vegetable oil
processors in the country reportedly imported an estimated 35,000 tons
of palm kernel in CY2005 from the West African Sub-region, especially
Ivory Coast.

Although Nigeria has long since left the export trade in palm produce
and is now a net importer, the oil palm industry remains an important
contributor to the nation's economy. The sector is a major source of
income for farmers in the palm belt, accounts for close to 70 percent of
total vegetable oil consumption in Nigeria, and supplies a growing
demand by the local industry for raw material for the manufacture of
edible oil, soap, and detergents. Other important oilseeds produced in
Nigeria include peanuts, cottonseed and soybeans.

######## Nigeria's Vegetable Oil Profile

  ----------------------- ----------------------- -----------------------
  **Commodity**           **Quantity**            **Percentage share**

  Palm oil                800,000                 50

  Palm Kernel oil         270,000                 17

  Other Vegetable oil     260,000                 16

  Deficit/Imports         270,000                 17

  **National              **1,600,000**           **100**
  Requirement**                                   
  ----------------------- ----------------------- -----------------------

Exchange Rate: 130 Naira = 1 US\$

## PSD Table: Palm Oil

+---------------------+------+------+------+------+------+------+------+
| Nigeria             |      |      |      |      |      |      |      |
|                     |      |      |      |      |      |      |      |
| ###### Oil, Palm    |      |      |      |      |      |      |      |
+---------------------+------+------+------+------+------+------+------+
|                     | **20 | **R  | **20 | **Es | **20 | **Fo | **U  |
|                     | 04** | evis | 05** | tima | 06** | reca | OM** |
|                     |      | ed** |      | te** |      | st** |      |
+---------------------+------+------+------+------+------+------+------+
|                     | **   | **   | **   | **   | **   | **   |      |
|                     | USDA | Post | USDA | Post | USDA | Post |      |
|                     | Offi | E    | Offi | Es   | Offi | Es   |      |
|                     | cial | stim | cial | tima | cial | tima |      |
|                     | \    | ate\ | \    | te** | \    | te** |      |
|                     | [Old | [New | [Old |      | [Old |      |      |
|                     | \]** | \]** | \]** | **\  | \]** | **\  |      |
|                     |      |      |      | [New |      | [New |      |
|                     |      |      |      | \]** |      | \]** |      |
+---------------------+------+------+------+------+------+------+------+
| ######              |      | 10/  |      | 10/  |      | 10/  | MM/  |
| # Market Year Begin |      | 2004 |      | 2005 |      | 2006 | YYYY |
+---------------------+------+------+------+------+------+------+------+
| **Area Planted**    | 2710 | 2710 | 2710 | 2710 | 0    | 2710 | (    |
|                     |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | HA)  |
+---------------------+------+------+------+------+------+------+------+
| **Area Harvested**  | 2630 | 2630 | 2630 | 2630 | 0    | 2635 | (    |
|                     |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | HA)  |
+---------------------+------+------+------+------+------+------+------+
| **Trees**           | 28   | 28   | 28   | 28   | 0    | 28   | (    |
|                     | 0000 | 0000 | 0100 | 0100 |      | 0100 | 1000 |
|                     |      |      |      |      |      |      | TR   |
|                     |      |      |      |      |      |      | EES) |
+---------------------+------+------+------+------+------+------+------+
| **Beginning         | 25   | 25   | 26   | 26   | 27   | 27   | (    |
| Stocks**            |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **Production**      | 790  | 790  | 800  | 800  | 0    | 810  | (    |
|                     |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **MY Imports**      | 200  | 200  | 210  | 210  | 0    | 220  | (    |
|                     |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **MY Imp. from      | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| U.S.**              |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **MY Imp. from the  | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| EC**                |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **TOTAL SUPPLY**    | 1015 | 1015 | 1036 | 1036 | 27   | 1057 | (    |
|                     |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **MY Exports**      | 4    | 4    | 4    | 4    | 0    | 9    | (    |
|                     |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **MY Exp. to the    | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| EC**                |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **Industrial Dom.   | 185  | 185  | 200  | 200  | 0    | 210  | (    |
| Consum**            |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **Food Use Dom.     | 800  | 800  | 805  | 805  | 0    | 810  | (    |
| Consump.**          |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **Feed Waste        | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| Consumption**       |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **TOTAL Dom.        | 985  | 985  | 1005 | 1005 | 0    | 1020 | (    |
| Consumption**       |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **Ending Stocks**   | 26   | 26   | 27   | 27   | 0    | 28   | (    |
|                     |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **TOTAL             | 1015 | 1015 | 1036 | 1036 | 0    | 1057 | (    |
| DISTRIBUTION**      |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **Calendar Year     | 50   | 50   | 70   | 70   | 0    | 100  | (    |
| Imports**           |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **Calendar Yr Imp.  | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| U.S.**              |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **Calendar Year     | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| Exports**           |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **Calndr Yr Exp. to | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| U.S.**              |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+

## Price Table: Palm Oil

  -------------------- ------------ ------------------------ ------------
  **Prices Table**                                           

  **Country**          Nigeria                               

  **Commodity**        Oil, Palm                             

  Prices in            Naira        per uom                  Ton

                                                             

  Year                 2004         2005                     \% Change

  Jan                  135,000      120,000                  -11%

  Feb                  136,000      126,000                  -7%

  Mar                  106,000      126,000                  19%

  Apr                  103,000      130,000                  26%

  May                  108,000      130,000                  20%

  Jun                  111,000      132,000                  19%

  Jul                  114,000      136,000                  19%

  Aug                  125,000      136,000                  9%

  Sep                  131,000      137,000                  5%

  Oct                  129,000      137,000                  6%

  Nov                  125,000      140,000                  12%

  Dec                  120,000      141,000                  18%

                                                             

  Exchange Rate        130/1        Local Currency/US \$     

  Date of Quote        1/20/2006    MM/DD/YYYY               
  -------------------- ------------ ------------------------ ------------

# Production

Nigeria's palm oil production in MY2006 is forecast to rise to 810,000
tons, up from 800,000 tons in MY2005. The projected increase is based on
increased smallholder activities in response to Federal and State
government incentives and the on-going expansion and rehabilitation of
existing facilities. This partly reflects the modest impact of the GON's
Vegetable Oil Development Program (VODEP). The VODEP is a Presidential
initiative aimed at developing one million ha of oil palm and
rehabilitating 125,000 ha of existing plantations within five years.
AgOffice field visits in January 2006 revealed that the four new private
large plantations have commenced planting, while the existing estates
have embarked on field expansion and out-grower schemes.

Nigeria's oil palm production can be categorized into upstream and
downstream sectors.

A. The upstream sector comprises of primary production activities,
ranging from the development of seedlings to producing red palm oil and
palm kernel. This includes palm oil and kernel produced from 2.25
million hectares of wild palm groves, 400,000 hectares of small-scale
holdings and 50,000 hectares from large estates.

-   Wild groves\-\--Oil palm output from unorganized wild groves is well
    below optimum due largely to the low efficiency milling techniques
    used by local farmers. Post notes an increased exploitation of wild
    palms by rural farmers in the palm belt spurred by attractive
    producer prices.

-   Large estates\-\--AgOffice field visits revealed that four new
    privately owned estates commenced planting activities in the last
    two years. Existing estates have embarked on the rehabilitation and
    expansion of their plantations.

-   Smallholders\-\--Palm production from this sector is on the
    increase, due largely to the activities under the Presidential
    Initiative on VODEP. Incentives under the program include: reduced
    customs duties on imported agricultural machinery, distribution of
    palm seedlings at subsidized rates, and the provision of extension
    services to farmers.

Overall, Nigeria's upstream oil palm production is expanding but at a
relatively slow pace and output continues to lag behind national
consumption requirements. The slow pace is attributed to poor
implementation of government development programs. For instance, the
supply of subsidized seedlings is not backed by adequate extension
services, often resulting low rate of establishment.

B. Downstream oil palm processing consists of the crushing of palm
kernel, the refining of crude palm kernel oil into vegetable oil, and
red palm oil into palm olien. Despite excess capacity in the downstream
sector, investment is steadily increasing. The increase in investment is
due largely to a perception of low capital risk and a quick return on
investment. The industry's annual installed palm kernel crushing
capacity is estimated at more than 850,000 tons in MY2005, far exceeding
total available palm kernel, which is estimated at 660,000 tons. Palm
kernel crushers reportedly imported about 35,000 tons of palm kernel
from Ivory Coast during CY2005 to increase utilized capacity.

## 

# Consumption

The bulk of vegetable oil produced in Nigeria is for direct human
consumption. Red palm oil is a major component of the diet of most
Nigerians. Red palm oil and palm kernel oil also are refined into palm
Olean and vegetable oil, respectively for human consumption. Combined,
these two account for approximately 70 percent of total vegetable
consumed in the country. Industrial consumption of red palm oil and palm
kernel oil in MY2005 is estimated at 180,000 tons and 50,000 tons,
respectively. Industrial utilization includes: soap, detergent, baker's
fat, margarine, etc. Soap manufacturers in the country are increasingly
turning to imported tallow, because the prices of palm oil and palm
kernel oil are significantly above world market prices level.
Approximately 55 percent of all palm kernel meal produced in Nigeria is
exported to the EU because of low domestic demand by the animal feed
industry. Producers of palm kernel meal are looking for U.S. importers
of this inexpensive source of animal feed.

## PSD Table: Palm Kernel

+---------------------+------+------+------+------+------+------+------+
| Nigeria             |      |      |      |      |      |      |      |
|                     |      |      |      |      |      |      |      |
| Oilseed, Palm       |      |      |      |      |      |      |      |
| Kernel              |      |      |      |      |      |      |      |
+---------------------+------+------+------+------+------+------+------+
|                     | **20 | **R  | **20 | **Es | **20 | **Fo | **U  |
|                     | 04** | evis | 05** | tima | 06** | reca | OM** |
|                     |      | ed** |      | te** |      | st** |      |
+---------------------+------+------+------+------+------+------+------+
|                     | **   | **   | **   | **   | **   | **   |      |
|                     | USDA | Post | USDA | Post | USDA | Post |      |
|                     | Offi | Esti | Offi | Esti | Offi | Esti |      |
|                     | cial | mate | cial | mate | cial | mate |      |
|                     | \    | \    | \    | \    | \    | \    |      |
|                     | [Old | [New | [Old | [New | [Old | [New |      |
|                     | \]** | \]** | \]** | \]** | \]** | \]** |      |
+---------------------+------+------+------+------+------+------+------+
| ######              |      | 10/  |      | 10/  |      | 10/  | MM/  |
| # Market Year Begin |      | 2004 |      | 2005 |      | 2006 | YYYY |
+---------------------+------+------+------+------+------+------+------+
| **Area Planted**    | 2710 | 2710 | 2710 | 2710 | 0    | 2710 | (    |
|                     |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | HA)  |
+---------------------+------+------+------+------+------+------+------+
| **Area Harvested**  | 2630 | 2630 | 2630 | 2630 | 0    | 2635 | (    |
|                     |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | HA)  |
+---------------------+------+------+------+------+------+------+------+
| **Trees**           | 28   | 28   | 28   | 28   | 0    | 28   | (    |
|                     | 1000 | 0100 | 0100 | 0100 |      | 0100 | 1000 |
|                     |      |      |      |      |      |      | TR   |
|                     |      |      |      |      |      |      | EES) |
+---------------------+------+------+------+------+------+------+------+
| **Beginning         | 0    | 0    | 0    | 0    | 0    | 5    | (    |
| Stocks**            |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **Production**      | 650  | 650  | 650  | 650  | 0    | 665  | (    |
|                     |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **MY Imports**      | 0    | 30   | 0    | 30   | 0    | 30   | (    |
|                     |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **MY Imp. from      | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| U.S.**              |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **MY Imp. from the  | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| EC**                |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **TOTAL SUPPLY**    | 650  | 680  | 650  | 680  | 0    | 700  | (    |
|                     |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **MY Exports**      | 6    | 6    | 5    | 5    | 0    | 0    | (    |
|                     |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **MY Exp. to the    | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| EC**                |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **Crush Dom.        | 634  | 660  | 635  | 660  | 0    | 670  | (    |
| Consumption**       |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **Food Use Dom.     | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| Consump.**          |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **Feed,Seed,Waste   | 10   | 14   | 10   | 10   | 0    | 20   | (    |
| Dm.Cn.**            |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **TOTAL Dom.        | 644  | 674  | 645  | 670  | 0    | 690  | (    |
| Consumption**       |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **Ending Stocks**   | 0    | 0    | 0    | 5    | 0    | 10   | (    |
|                     |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **TOTAL             | 650  | 680  | 650  | 680  | 0    | 700  | (    |
| DISTRIBUTION**      |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **Calendar Year     | 0    | 35   | 0    | 30   | 0    | 35   | (    |
| Imports**           |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **Calendar Yr Imp.  | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| U.S.**              |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **Calendar Year     | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| Exports**           |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+
| **Calndr Yr Exp. to | 0    | 0    | 0    | 0    | 0    | 0    | (    |
| U.S.**              |      |      |      |      |      |      | 1000 |
|                     |      |      |      |      |      |      | MT)  |
+---------------------+------+------+------+------+------+------+------+

## PSD Table: Palm Kernel Oil

+-----------------------+-----+-----+-----+-----+-----+-----+-----+
| Nigeria               |     |     |     |     |     |     |     |
|                       |     |     |     |     |     |     |     |
| Oil, Palm Kernel      |     |     |     |     |     |     |     |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
|                       | **  | **  | **  | **E | **  | **F | *   |
|                       | 200 | Rev | 200 | sti | 200 | ore | *UO |
|                       | 4** | ise | 5** | mat | 6** | cas | M** |
|                       |     | d** |     | e** |     | t** |     |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
|                       | **U | **P | **U | **P | **U | **P |     |
|                       | SDA | ost | SDA | ost | SDA | ost |     |
|                       | Of  | Es  | Of  | Es  | Of  | Es  |     |
|                       | fic | tim | fic | tim | fic | tim |     |
|                       | ial | ate | ial | ate | ial | ate |     |
|                       | \[O | \[N | \[O | \[N | \[O | \[N |     |
|                       | ld\ | ew\ | ld\ | ew\ | ld\ | ew\ |     |
|                       | ]** | ]** | ]** | ]** | ]** | ]** |     |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
| ####                  |     | 1   |     | 1   |     | 1   | M   |
| ### Market Year Begin |     | 0/2 |     | 0/2 |     | 0/2 | M/Y |
|                       |     | 004 |     | 005 |     | 006 | YYY |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
| **Crush**             | 634 | 660 | 635 | 660 | 0   | 670 | (1  |
|                       |     |     |     |     |     |     | 000 |
|                       |     |     |     |     |     |     | MT) |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
| **Extr. Rate,         | 0.  | 0.  | 0.  | 0.  | 0   | 0.  | (PE |
| 999.9999**            | 410 | 412 | 411 | 412 |     | 410 | RCE |
|                       | 095 | 121 | 024 | 121 |     | 448 | NT) |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
| **Beginning Stocks**  | 10  | 10  | 10  | 10  | 10  | 10  | (1  |
|                       |     |     |     |     |     |     | 000 |
|                       |     |     |     |     |     |     | MT) |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
| **Production**        | 260 | 272 | 261 | 272 | 0   | 275 | (1  |
|                       |     |     |     |     |     |     | 000 |
|                       |     |     |     |     |     |     | MT) |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
| **MY Imports**        | 1   | 1   | 1   | 1   | 0   | 1   | (1  |
|                       |     |     |     |     |     |     | 000 |
|                       |     |     |     |     |     |     | MT) |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
| **MY Imp. from U.S.** | 0   | 0   | 0   | 0   | 0   | 0   | (1  |
|                       |     |     |     |     |     |     | 000 |
|                       |     |     |     |     |     |     | MT) |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
| **MY Imp. from the    | 0   | 0   | 0   | 0   | 0   | 0   | (1  |
| EC**                  |     |     |     |     |     |     | 000 |
|                       |     |     |     |     |     |     | MT) |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
| **TOTAL SUPPLY**      | 271 | 283 | 272 | 283 | 10  | 286 | (1  |
|                       |     |     |     |     |     |     | 000 |
|                       |     |     |     |     |     |     | MT) |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
| **MY Exports**        | 1   | 1   | 1   | 1   | 0   | 1   | (1  |
|                       |     |     |     |     |     |     | 000 |
|                       |     |     |     |     |     |     | MT) |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
| **MY Exp. to the EC** | 0   | 0   | 0   | 0   | 0   | 0   | (1  |
|                       |     |     |     |     |     |     | 000 |
|                       |     |     |     |     |     |     | MT) |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
| **Industrial Dom.     | 86  | 86  | 86  | 86  | 0   | 86  | (1  |
| Consum**              |     |     |     |     |     |     | 000 |
|                       |     |     |     |     |     |     | MT) |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
| **Food Use Dom.       | 174 | 186 | 175 | 186 | 0   | 189 | (1  |
| Consump.**            |     |     |     |     |     |     | 000 |
|                       |     |     |     |     |     |     | MT) |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
| **Feed Waste Dom.     | 0   | 0   | 0   | 0   | 0   | 0   | (1  |
| Consum**              |     |     |     |     |     |     | 000 |
|                       |     |     |     |     |     |     | MT) |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
| **TOTAL Dom.          | 260 | 272 | 261 | 272 | 0   | 275 | (1  |
| Consumption**         |     |     |     |     |     |     | 000 |
|                       |     |     |     |     |     |     | MT) |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
| **Ending Stocks**     | 10  | 10  | 10  | 10  | 0   | 10  | (1  |
|                       |     |     |     |     |     |     | 000 |
|                       |     |     |     |     |     |     | MT) |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
| **TOTAL               | 271 | 283 | 272 | 283 | 0   | 286 | (1  |
| DISTRIBUTION**        |     |     |     |     |     |     | 000 |
|                       |     |     |     |     |     |     | MT) |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
| **Calendar Year       | 0   | 0   | 0   | 50  | 0   | 0   | (1  |
| Imports**             |     |     |     |     |     |     | 000 |
|                       |     |     |     |     |     |     | MT) |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
| **Calendar Yr Imp.    | 0   | 0   | 0   | 0   | 0   | 0   | (1  |
| U.S.**                |     |     |     |     |     |     | 000 |
|                       |     |     |     |     |     |     | MT) |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
| **Calendar Year       | 0   | 0   | 0   | 0   | 0   | 0   | (1  |
| Exports**             |     |     |     |     |     |     | 000 |
|                       |     |     |     |     |     |     | MT) |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+
| **Calndr Yr Exp. to   | 0   | 0   | 0   | 0   | 0   | 0   | (1  |
| U.S.**                |     |     |     |     |     |     | 000 |
|                       |     |     |     |     |     |     | MT) |
+-----------------------+-----+-----+-----+-----+-----+-----+-----+

## Price Table: Palm Kernel Oil

  ------------------ ----------------- ---------------------- -----------
  **Prices Table**                                            

  **Country**        Nigeria                                  

  **Commodity**      Oil, Palm Kernel                         

  Prices in          Naira             per uom                Ton

                                                              

  Year               2004              2005                   \% Change

  Jan                156,000           127,000                -19%

  Feb                128,000           128,000                0%

  Mar                135,000           150,000                11%

  Apr                124,000           140,000                13%

  May                122,000           152,000                25%

  Jun                119,000           150,000                26%

  Jul                122,000           152,000                25%

  Aug                129,000           152,000                18%

  Sep                130,000           137,000                5%

  Oct                130,000           137,000                5%

  Nov                133,000           137,000                3%

  Dec                133,000           140,000                5%

                                                              

  Exchange Rate      130/1             Local Currency/US \$   

  Date of Quote      1/20/2006         MM/DD/YYYY             
  ------------------ ----------------- ---------------------- -----------

## 

# Trade

Industry sources estimate Nigeria's total informal imports of red palm
oil and palm Olean in MY2005 at approximately 210,000 tons, up from the
revised estimate of 200,000 tons a year earlier. Many importers
reportedly circumvent the GON's import ban on vegetable oil by declaring
to local customs that their red palm oil imports as other industrial raw
material. Such a categorization also offered a reduced duty payment to
customs.

# Marketing

Marketing opportunities exist for U.S. exporters of inedible tallow,
which is a close and preferred substitute for palm oil in soap
manufacture. Soap manufacturers use crude palm oil when available.
However, the increasing demand for palm oil to be used as edible product
and a GON's import ban has resulted in a shortage of palm oil. The
shortage, combined with the GON's import ban on soap has increased
import demand for tallow. Additionally, local palm oil tends to have a
high free fatty acid (FFA) level. The High FFA level, coupled with a
very deep red color means incurring additional bleaching costs, thus
giving tallow about \$20 per ton premium. Local soap manufacturers also
indicated preference for tallow because of its better foaming ability.

Available U.S. export data show 40,000 tons of U.S. inedible tallow
entered Nigeria in CY2005, up from 29,600 tons a year earlier. Post
expects US exports to increase above 60,000 tons in CY2006, especially
following increased contacts generated by the visit of a five-man
Nigerian trade team to the U.S. in 2005. The National Renderers
Association sponsored the team. The major competitors for Nigeria's
growing tallow market are Canada, EU and Australia. The GON's import
duty on tallow is 15 percent.