Smuggled oil products undermining local industry - OPDAG

An influx of smuggled oil products into the domestic market is eroding local producers’ competitiveness and threatening sustainability of the country’s oil palm industry.

According to the Oil Palm Development Association of Ghana (OPDAG), smugglers are exploiting tax loopholes to flood the market with cheap, untaxed oil – putting locally produced brands at a disadvantage.

OPDAG president Paul Kwame Aminu points out 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.

Aminu said OPDAG has an existing traceability system that can be extended to suppliers and appealed for the National Food and Buffer Stock Company (NAFCO) to share details of their suppliers in order to jointly prevent smuggling and guarantee quality.

This is a sound proposition that must be taken on board if authorities are really bent on curbing the high incidence of smuggling that threatens the sustainability of Ghana’s oil palm industry.

Data from OPDAG show that an average 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.

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

This is a very disturbing situation and this Paper believes the Ministry of Trade and Industry must be interested in such an unfortunate state of affairs undermining development of the local oil palm industry.

OPDAG is firmly convinced that the local oil palm industry has enough 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 domestic market needs – and even supply some ECOWAS countries through exports – and has potential to boost the country’s foreign exchange earnings.”

Government policy is targetting self-sufficiency in palm oil production by 2032 under a new National Policy on Integrated Oil Palm Development announced in the 2026 Budget.

Running from 2026 to 2032, it 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$500million investment in the sector.