Crude oil is a myth – Palm oil is far more profitable (II)

But I have good news for us; PALM OIL IS A MUCH MORE PROFITABLE PRODUCT. That’s right!

Take a walk with me on this;

• A metric tonne of palm oil sells currently around $500 in the international market
• A tonne of palm oil is almost like a tonne of water, which is 1,000 litters (Palm oil density is 0.93 compared to water – almost the same)
• Therefore one liter of palm oil in the global markets sells for about $0.50
• $0.50 is equal to at least N150 – higher than one liter of crude oil at N115, and costs far less to produce (certainly not $30 per barrel)
• Our ancestors have been producing palm oil on their own and trading globally since at least the year 1300. We need little foreign assistance if we can think ourselves
• It takes very little technology, but we can scale up like the Indonesians and Malaysians who got most of their palm seeds from here in Africa and each individually produce at least 25 times what Nigeria does today
• The Malaysians and Indonesians have gone ahead to build sophisticated markets and even developed advanced financial instruments based on palm oil
• Nigeria imports palm oil from Malaysia/Indonesia
• Palm oil market is equally elastic (and also a little less volatile compared to crude oil), because it is a product useful for many industries
• Palm oil grows in the wild in Nigeria and is naturally sub-optimized
• The last time I bought palm oil around Owo, Ondo State, I recall it sold for something like N2500 for a 4 liter jerry can. That is like N625 per litre.
• At peak, palm oil sold in global markets for up to $1500 a tonne, or $1.50 (N450) a liter. The highest price of crude oil is approximately N280 per liter (in 2008 crude oil sold for $145 per barrel. Even at today’s exchange rate of N305, a barrel was worth N44,225. A barrel contains 159 litres)

So perhaps we are better off propping up palm oil as our chief export product? What is happening to research on palm oil from NIFOR and elsewhere? Is it lack of patriotism that is wrong with Nigerians or do we have a breed of Nigerians sworn never to allow Nigeria make progress? We have landmass and a weather that is very amenable to grow the produce en masse. Our locals will benefit more from such a drive. We would not need to depend so much on foreign ‘investors’ or technology. It will be less injurious for our environment. Indonesia and Malaysia have made so much progress on palm oil that some western activists are even trying to slow down the cultivation of palm oil. They said orangutans are suffering because more land is being taken for palm oil cultivation. Look at us here!

Anyway, I don’t intend to start a palm oil plantation. There are probably many more products that will give us less stress on which we can also focus here. We certainly shouldn’t be putting our people through this suffering. Of recent, this terrible government of ours is trying to justify their hopeless budget under the pretext of declining crude oil prices. But I have done enough research to show that the tethering of our economic fortune to crude is totally unnecessary. Another research says that indeed we did not suffer from Dutch disease because more money was spent on agriculture after we had discovered crude oil. We suffered instead from the speed with which people looted whatever was budgeted – In every industry. If one considers it appropriately it will be hard to have respect for so many of the old people who have run Nigeria at any level. They simply laid this land to waste.

I wonder who cursed this country. But we can un-curse her. What is happening now is that this current scenario is totally unacceptable. Can we have new thinking, please somebody?

Concluded.

(This column will be rested for about two months, dear readers)