Importantly, the data suggests that instead of looking for market opportunities that are far away which would incur significant transportation cost and import tariffs, Ghanaian oil palm exporters should look inward to the ECOWAS sub-region, where transportation costs are lower, Ghanaian exports are zero tariff rated and consequently Ghana’s exporters can be most cost competitive.
With the operationalization of the Africa Continental Free Trade Area (AfCFTA) expected to begin in July 2020, GEPA is advising Ghana’s oil palm exporters to seriously focus attention on African markets such as Angola and Egypt over other emerging markets outside the continent.
In 2018 for instance, Angola imported US$141.48 million worth of oil palm products and Egypt US$685.28 million. However, Ghana’s market share of the product in these two African countries was zero percent.
Some other notable importers of palm oil from Ghana last year included Burkina Faso (US$3.94m), Cote d’Ivoire (US$2.61m), Nigeria (US$978,000), UK (US$934,000), USA (US$795,000) and Netherlands (US$205,000). The top five importing countries, comprising Senegal, Burkina Faso, Cote d’Ivoire, Nigeria and UK, accounted for about 96 percent of total value of exports of palm oil products from Ghana.
However, easily the single biggest target market for Ghana’s oil palm is Senegal. The Authority asserts that the high demand for palm oil derivatives in Senegal makes the country a prime target for Ghanaian exporters to significantly increase local production volumes in order to increase Ghana’s exports of the product.
This has become all the more imperative as Ghana, after significantly increasing its export of the product to Senegal in 2016 and 2017, recorded a huge drop in the 2018.
In 2018, Senegal imported US$27.65 million of the product from Ghana as compared to US$51.13 million in 2017 and US$41.37 million in 2016. This huge drop from 2017 to 2018 represents a decrease of 45.9 percent.
According to GEPA, the drop reflects a sub region wide decline in exports to the ECOWAS bloc. The report indicates that despite the blip, Ghana still remains the second largest supplier of the product to the Senegalese market after Malaysia.
In fact, in 2018, Senegal’s importation of palm oil amounted to US$103.93 million with Ghana having a market share of 26.6 percent. Despite the cost of transportation and lack of proximity, Malaysia emerged as the largest supplier in the Senegalese market with an estimated export value of US$40.29 million and market share of 38.8 percent.
What this implies is that the Senegalese market alone has the potential to absorb more than what Ghana currently exports worldwide. Overall, Ghana’s exports of palm oil in 2018 amounted to US$71.3 million as against US$84.24 million in 2017.
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