Palm oil is poised for a bullish trend as Indonesia ramps up its biofuel ambitions, which could benefit the Nigerian industry.
This shift is expected to decrease the amount of palm oil available for export from the world’s leading producer, intensifying a global supply squeeze.
The cash crop used in many products, from chocolate to cosmetics, has experienced fluctuations in recent months due to concerns over growing stockpiles and erratic demand.
Currently, the price stands at $999.61 per ton, down 6% year-to-date.
Indonesia, already a global leader in biofuels, plans to boost its domestic biodiesel mandate from 40% to 50% by the second half of next year. This initiative, known as the B50 program, aims to reduce the country’s substantial fuel import costs while also cutting greenhouse gas emissions. However, this policy, combined with stagnant output growth from the world’s largest producers, could result in higher global prices, alter vegetable oil supply flows, and potentially fuel food inflation as buyers may need to turn to more expensive alternatives.
Customers may have to seek supplies elsewhere because of Indonesia’s strict export controls intended to support its biodiesel production. Palm oil, derived from the fruit of the oil palm tree (Elaeis guineensis), accounts for approximately 38% of all vegetable oil produced globally, making it the most widely produced and consumed vegetable oil in the world.
About half of all packaged consumer goods, including snacks and margarine, contain this highly versatile oil, which is also used in biofuels, oleochemicals, and cosmetics.
Nigeria remains the largest producer of palm oil, yet it struggles with a persistent supply shortage. This has resulted in the importation of nearly half of its annual consumption, ranging from 1.8 to 2 million metric tons.
Local consumption reached 1.8 million tons during the 2022–2023 crop year while production rose to 1.4 million metric tons in 2023, indicating strong demand from various sectors, including industry, food processing, and cooking. Palm oil prices surged by 101.3 percent in 2024, reaching an all-time high of N2,473,500 per ton in December because of supply constraints, exchange rate fluctuations, and inflation.
Edo, Nigeria’s center for palm oil, has allotted more than 70,000 hectares, drawing $500 million in investments—the most in sub-Saharan Africa.
Presco, Okomu Oil, Dufil Prima Foods (Indomie manufacturers), and Flour Mills Nigeria are important participants in de-risking the value chain for sustainable production.
Okomu Oil Palm reported a net profit of N60.3 billion in the first nine months of 2025 (up 50% from the full year 2024) on revenue of N174 billion (up 63%), thanks to the benefits of the naira devaluation and rising commodity prices.
A final dividend of N44 per share is anticipated, increasing the yearly payout to N84—more than three times 2024 levels. To date, its stock has increased 130% to N1,020.
Presco’s surge: Presco reported a staggering 4,088.7 percent increase in after-tax profit in 2024 compared to 2015 levels. Taking advantage of Edo’s fertile lands and export prospects, fellow giants.
Ellah Lakes is targeting 2 percent of Nigeria’s annual palm oil market in its expansion plans, which is valued at over N3 trillion (based on 1.5 million tons priced at N2,000 per liter). The company intends to invest N155 billion in oil palm plantations, N45 billion in a cassava flour factory, and additional funds for pig farming and processing.
Meanwhile, Governor Umo Eno of Akwa Ibom state announced an investment of N31 billion (approximately $20.2 million) in line with the National Palm Oil Development Strategy set forth by the Oil Palm Growers Association of Nigeria (OPGAN), aimed at enhancing oil palm development starting in 2026. The primary objective of this plan is to support smallholders by increasing cultivation.
Meanwhile, Governor Umo Eno of Akwa Ibom state announced an investment of N31 billion (approximately $20.2 million) in line with the National Palm Oil Development Strategy set forth by the Oil Palm Growers Association of Nigeria (OPGAN), aimed at enhancing oil palm development starting in 2026. The primary objective of this plan is to support smallholders by increasing cultivation.
Palm oil is economically attractive because it yields significantly more, producing 5 to 10 times the amount per hectare compared to alternatives like soybean or sunflower oil. However, this high yield has raised concerns about sustainability due to its environmental and social impacts.
As of November 2025, regulations concerning biofuels are leading to a tightening of the industry’s supply. Despite this, demand for palm oil remains high, driven by the growing global population and the increased consumption of processed foods.