Benchmark valuation policy killing the oil palm industry

Stakeholders in the oil palm industry have called on the government to exempt trading in the commodity from the benchmark valuation to safeguard the sector

Ghana News Agency (Accra) – Stakeholders in Ghana’s oil palm industry have said the sector is on the verge of collapse as cheap imports continue to take over the local market.

They said unless the government acts quickly, there will soon be no local oil palm industry.

Samuel Avaala, president of the Oil Palm Development Association of Ghana (OPDAG), said since the government introduced the benchmark valuation policy last year, the industry had struggled to survive.

The benchmark valuation policy had made oil palm imports cheaper than local produce, he said.

Before the introduction of the benchmark value, a 25-litre container (yellow gallon) of oil produced locally was selling at GHC145, against GHC150 for the imported alternative.

However, he said, when the policy kicked in, locally produced vegetable oil remained at GHC145 but imported products began selling at between GHC75 and GHC120.

“This situation has affected local players in the industry, as refineries continue to shut down and lay off workers,” Avaala said.

Many oil palm farmers are out of business because of the sector’s dwindling fortunes.

Avaala said the benchmark valuation policy has affected the entire value chain in the sector negatively.

Stakeholders want the government to take steps to rescue the industry from collapse and save industry players from an already dire situation. They continue to invest huge sums of money in their operations, Avaala said.

“The benchmark valuation policy has virtually brought the sector to its knees, coupled with the outbreak of the coronavirus pandemic. OPDAG fears the worst for the industry,” he said.

OPDAG called on the government to exempt the sector from benchmark valuation to safeguard farmers’ interest and to guarantee the livelihood of operators in the oil palm value chain.

He expressed the hope that the engagement with the government would lead to a reversal of benchmark valuation in the mid-year Budget and the 2021 Budget statement by the Ministry of Finance.

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Ghana News Agency
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