Rising global demand positions Nigeria’s palm oil industry for US$105M profit in 2025: Afrinvest West Africa

NIGERIA – Nigeria’s leading palm oil companies are projected to post a collective after-tax profit of US$105M (₦161 billion) by 2025, according to the latest industry forecast from Afrinvest West Africa.

According to a new report by Afrinvest West Africa, the strong forecast is anchored on rising global crude palm oil (CPO) prices and sustained operational performance from industry leaders Presco Plc and Okomu Oil Palm Plc.

The report projects a 38.8% year-on-year growth in profit before tax (PBT) from ₦166.8 billion (US$108.6M) in 2024 to ₦231.5 billion (US$150.7M) in 2025.

Additionally, profit after tax (PAT) is projected to rise by 36.8% to ₦161 billion (US$105M) as both companies demonstrate their strategic prowess, capitalizing on favorable market dynamics and internal efficiency gains.

Afrinvest projects global crude palm oil (CPO) prices to rise to US$1,200 per metric tonne (MT) by late 2025, up from the current US$900/MT.

This increase is fueled by heightened biodiesel demand in Southeast Asia, ongoing supply chain challenges, and strengthening trade ties between major economies like China and the United States.

“Nigeria stands to benefit significantly from these developments, especially as countries like Indonesia and Malaysia tighten domestic biofuel policies, limiting exports,” Afrinvest noted in its 2025 Oil Palm Sector Update.

In 2024, domestic palm oil prices surged by 56.8%, reaching ₦420,906 (US$274.01) per metric tonne, driven by international market shifts, weakening of the naira, and escalating import expenses.

This sharp increase fueled a 90.2% rise in sector revenue to ₦337.7 billion (US$219.8M), with Presco contributing ₦207.5 billion (US$135.1 M) and Okomu ₦130.2 billion (US$84.8M).

Despite facing macroeconomic challenges, such as a 46.2% depreciation of the naira and soaring energy expenses, the companies sustained strong profit margins by enhancing production efficiency and optimizing operations at scale.

Afrinvest forecasts strong profitability for Nigeria’s palm oil sector in 2025, supported by stable exchange rates, reduced energy expenses, and more affordable borrowing conditions to support profit growth.

With rising global crude palm oil (CPO) prices and a domestic supply gap of 450,000 metric tonnes, the industry is positioned as a key non-oil growth area.

Despite being the world’s fifth-largest producer, Nigeria only accounts for 1.9% of global output and still falls short of meeting local demand. In 2024, production stalled at 1.5 million MT while consumption rose to 2 million MT.

Experts suggest that unlocking over 2.5 million hectares of underused farmland, attracting more investment, and implementing targeted reforms could help Nigeria revive its “Red Gold” legacy and integrate palm oil into the biofuels sector.

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