Key Points
- Research suggests Nigeria’s palm oil industry is outperforming, with strong financials for companies like Presco and Okomu, but many Nigerians focus on fintech instead.
- It seems likely that foreign investors are key players, often benefiting more due to early market entry and resource access.
- The evidence leans toward a significant domestic supply gap, with Nigeria importing over 450,000 metric tons annually, despite production potential.
- Global demand for palm oil is expected to grow, driven by food, cosmetics, and biofuels, presenting opportunities for Nigeria.
- Processing is crucial for value addition, creating jobs and boosting exports, but Nigeria faces readiness challenges.
Financial Performance
Nigeria’s palm oil industry has shown robust growth, with Presco Plc reporting ₦198.7 billion in revenue and ₦111.9 billion in profit before tax for the first half of 2025, aligning with the user’s mention of ₦89 billion profit (likely net profit, given earnings per share calculations). Okomu Oil’s market cap recently surpassed ₦1 trillion, supporting claims of strong valuation. Investment returns are significant, with a ₦10 million investment in January potentially growing to over ₦23 million for Okomu and ₦32 million for Presco by August 2025, based on share price increases.
Supply and Demand Dynamics
Nigeria imports over 450,000 metric tons of palm oil annually to meet demand, as domestic production remains at 1.5 million metric tons while consumption reached 2.0 million metric tons in 2024. Global demand projections suggest growth, with estimates around 98 million metric tons by 2030 for palm oil, though the user’s 200 million tons likely refers to all vegetable oils, given industry reports.
Foreign Investment Role
Foreign investors, such as Socfin, are major players, leveraging Nigeria’s land and supply gaps. This has led to concerns, with local associations cautioning against foreign dominance in primary production, highlighting a controversy over economic benefits versus national control.
Importance of Processing
Processing adds value by transforming crude palm oil into refined products like cooking oil and cosmetics, increasing profit margins and creating jobs. However, Nigeria’s readiness is limited by infrastructure and policy challenges, underscoring the need for investment in processing facilities.
Survey Note: Detailed Analysis of Nigeria’s Palm Oil Industry
Nigeria’s palm oil industry is quietly emerging as a powerhouse, delivering outsized returns while often overshadowed by the fintech and digital startup frenzy. This survey note delves into the sector’s financial performance, market dynamics, foreign investment trends, and the critical role of processing, providing a comprehensive overview based on recent data and trends as of August 2, 2025.
Financial Performance and Investment Returns
The financial health of Nigeria’s palm oil giants, Presco Plc and Okomu Oil, underscores the sector’s potential. Presco reported a revenue of ₦198.7 billion and a profit before tax of ₦111.9 billion for the half year ended June 30, 2025, with an earnings per share of ₦88.72, translating to a net profit close to the user’s mentioned ₦89 billion, given 1 billion shares outstanding, according to [Proshare].
Okomu Oil’s market capitalization recently surpassed ₦1 trillion, with a closing share price of ₦1,050.00 on August 1, 2025, up from ₦444.00 at the year’s start [Nigerian Exchange Group].
Investment returns are compelling. For Presco, a share price increase from ₦475.00 in January to ₦1,550.00 by August 2025 implies a 226.32% gain, turning a ₦10 million investment into approximately ₦32.6 million. For Okomu, from ₦444.00 to ₦1,050.00, the return is about 136.49%, yielding around ₦23.6 million, aligning with the user’s claim of over ₦22 million, likely referring to Okomu [ TradingView ].
Supply and Demand Dynamics
Despite production, Nigeria faces a supply gap, importing over 450,000 metric tons annually to meet demand. In 2024, domestic production was 1.5 million metric tons, while consumption grew to 2.0 million metric tons, widening the gap [ Leadership NG ]. This reliance on imports, costing over $600 million annually, highlights inefficiencies and opportunities for local production expansion.
Globally, palm oil demand is projected to grow, with current consumption at around 78 million metric tons in 2022/23, expected to reach approximately 98 million metric tons by 2030, assuming a 3% annual growth rate [Statista ]. The user’s mention of 200 million tons likely refers to all vegetable oils, with projections suggesting around 240 million metric tons by 2030, driven by food, cosmetics, and biofuels [Grand View Research ].
Foreign Investment and Market Dynamics
Foreign investors are significant beneficiaries, with companies like Socfin, a Luxembourg-based firm, operating large plantations in Nigeria [Mongabay]. This has sparked controversy, with the National Palm Produce Association of Nigeria cautioning against foreign dominance in primary production, arguing it turns locals into laborers while foreigners reap profits [Leadership NG]. This reflects a tension between economic benefits and national control, with foreign investors leveraging Nigeria’s land and supply gaps.
The Critical Role of Processing
Processing is where wealth is retained, transforming crude palm oil into refined products like palm olein and stearin, used in food, cosmetics, and biofuels, significantly increasing profit margins [ResearchGate]. For instance, refining can double or triple the value, creating jobs and boosting exports. However, Nigeria faces challenges, including inadequate infrastructure, high financing costs, and policy inconsistencies, limiting readiness [CSIR-Oil Palm Research Institute].
ALSO READ: Cashew Market Report Nigeria – 2024
Personal Insights and Broader Implications
The user’s personal success in palm oil arbitrage highlights its stability and demand, driven by consistent market needs. This aligns with the sector’s potential to diversify Nigeria’s economy, reducing reliance on crude oil. However, the focus must shift from raw exports to processing, as seen in other commodities like cashew and cocoa, to capture value and ensure long-term prosperity.
Conclusion
Nigeria’s palm oil industry offers significant opportunities, yet faces challenges in supply, foreign dominance, and processing readiness. By addressing these, Nigeria can leverage global demand trends and transform the sector into a key economic driver, balancing local and foreign interests for sustainable growth.
Table: Financial Performance of Key Players (H1 2025)
| Company | Revenue (₦ Billion) | Profit Before Tax (₦ Billion) | Market Cap (₦ Trillion, Aug 1, 2025) |
|---|---|---|---|
| Presco Plc | 198.7 | 111.9 | 1.55 |
| Okomu Oil | 83 | 54 | 1.0017 |
Table: Supply and Demand Metrics (2024)
| Metric | Value (Million Metric Tons) |
|---|---|
| Domestic Production | 1.5 |
| Domestic Consumption | 2.0 |
| Import Gap | 0.45 |
| Global Palm Oil Demand (Projected 2030, Estimate) | ~98 |
References
- CSIR-Oil Palm Research Institute. (2025). Value Addition Division. Retrieved from https://oilpalmresearch.org/en/about/research-divisions/value-addition-division
- Grand View Research. (2025). Vegetable Oil Market Analysis. Retrieved from https://www.grandviewresearch.com/industry-analysis/vegetable-oil-market
- Leadership NG. (2024). Boosting Economy Through Palm Oil Production. Retrieved from https://leadership.ng/boosting-economy-through-palm-oil-production/
- Leadership NG. (2024). Oil Palm Producers Caution Against Foreign Involvement in Primary Production. Retrieved from https://leadership.ng/oil-palm-producers-caution-against-foreign-involvement-in-primary-production/
- Mongabay. (2022). In West and Central Africa, Palm Oil Investors Buckle Under Community Pressure. Retrieved from https://news.mongabay.com/2022/03/in-west-and-central-africa-palm-oil-investors-buckle-under-community-pressure/
- Nigerian Exchange Group. (2025). Equities Price List. Retrieved from https://ngxgroup.com/exchange/data/equities-price-list/
- Proshare. (2025). Presco Plc Reports Strong Half Year 2025 Financial Results with 121.8% Y-o-Y Growth. Retrieved from https://proshare.co/articles/presco-plc-reports-strong-half-year-2025-financial-results-with-121.8-y-o-y-growth?menu=Market&classification=Read&category=Corporate%2BResults
- ResearchGate. (2024). Appraising the Value Addition Dynamics in Oil Palm Production in Nigeria. Retrieved from https://www.researchgate.net/publication/382042510_Appraising_the_Value_Addition_Dynamics_in_Oil_Palm_Production_in_Nigeria
- Statista. (2025). Palm Oil Production Volume Worldwide. Retrieved from https://www.statista.com/statistics/613471/palm-oil-production-volume-worldwide/
- TradingView. (2025). Presco Plc and Okomu Oil Share Price Data. Retrieved from https://www.tradingview.com/symbols/NSENG-PRESCO/ and https://www.tradingview.com/symbols/NSENG-OKOMUOIL/
