Oil palm farmers worry over increasing smuggling

The Oil Palm Development Association of Ghana (OPDAG) has raised alarm over the growing influx of smuggled oil products into the domestic market, warning that the trend is eroding the competitiveness of local producers and threatening the sustainability of the industry.

According to OPDAG President, Paul Kwame Aminu, smugglers are exploiting tax loopholes to flood the market with cheaper, untaxed oil, putting locally produced brands at a disadvantage.

“There is the need to introduce a traceability system using blockchain technology to track the source and movement of oil supplies, particularly those destined for the school feeding programme,” he said.

Aminu admitted that the OPDAG have an existing traceability system that can be extended to suppliers, and appealled to the National Food and Buffer Stock Company (NAFCO) to share details of their suppliers in order to jointly prevent smuggling and guarantee quality.”

The association has also urged all oil suppliers to register with OPDAG to ensure that only certified and FDA-approved products are distributed nationwide.

“We want to make sure that all oil supplied to schools meets the highest standards of quality and safety,” he noted, adding that “we are committed to supporting NAFCO in achieving this goal.”

Data from OPDAG show that an average of 6,000 tonnes of finished edible oil is smuggled into the country every month and sold at abnormally low prices, severely undercutting locally produced brands.

The association estimates that the country loses nearly US$3 million monthly through illicit vegetable oil imports, arising from under-declaration, under-invoicing, mis-declaration, smuggling, diversion of goods in bond and in transit, as well as corruption at entry points.

Fuel prices drop across pumps.

OPDAG described the situation as deeply disturbing and “anti-Ghanaian”, warning that the persistent smuggling of edible oil will significantly reduce the annual financial contributions local producers make to the state.

The association stressed that the oil palm industry has the capacity to meet domestic demand, noting that existing crude palm oil refineries have a combined processing capacity of about 615,000 tonnes per annum, against an estimated national demand of 300,000 tonnes per annum.

“This clearly shows that local manufacturers have more than twice the capacity needed to serve the domestic market and even supply some ECOWAS countries through exports. This has the potential to boost the country’s foreign exchange earnings,” OPDAG said.

In line with current government policy, the country is targeting self-sufficiency in palm oil production by 2032 under a new National Policy on Integrated Oil Palm Development announced in the 2026 Budget.

The policy, which runs from 2026 to 2032, aims to develop more than 100,000 hectares of new oil palm plantations and create about 250,000 direct and indirect jobs, supported by an estimated US$500 million investment in the sector.

Meanwhile, to curb the situation, he said the association is working closely with NAFCO to stem the smuggling menace and promote increased domestic production of vegetable and palm oil.