Oil Palm assoc. welcomes exemption of palm oil from 50% benchmark value

The Oil Palm Development Association of Ghana (OPDAG), has welcomed government’s decision to exempt the oil palm from the 50% reduction in the benchmark value of imports as announced on Monday 11th May 2020.

According to them, the move will provide a level playing field to ensure that local producers remain competitive in the near future, while encouraging and attracting the needed investments for the development of the oil palm sector.

The Finance Minister, Ken Ofori-Atta in early April of 2020, directed the reduction of the benchmark value or delivery values of imports, by 50%, except for vehicles which were to be reduced by 30%, as part of efforts to reduce the menace of smuggling and make the country’s ports more competitive and attractive.

The Ghana Revenue Authority has dismissed reports that it has been directed by the Ministry of Finance to reverse the 50% benchmark value on imports.

According to the Authority, the benchmark value policy also known as the discount policy continues to be implemented

In a statement issued by the Association, its Executive Secretary, Selorm Quarme, explained that the benchmark value introduced in 2019, gave importers of palm oil and vegetable cooking oils an unfair pricing advantage over local producers”

“The price advantage to importers pushed a lot of farmers, processors and refiners and other businesses in the oil palm value chain out of business. We are however excited that a decision has been taken to exempt palm oil and the related cooking oils from this policy, which to us will not only inure to the benefit of all stakeholders especially all those within the value chain but will also make the sector attractive for investment, and for the development of the tree crops sector as envisaged in the Tree Crops Development Authority Act, 2019 Act 1010,” he said.

He also stated that prior to the introduction of the benchmark value, a 25liter (Yellow Gallon) of oil produced locally was selling at One Hundred and Forty-Five Ghana Cedis, (GH¢145) against One Hundred and Fifty Ghana Cedis (GH¢150) for the imported product.

However, when the policy kicked in, whereas the locally produced vegetable oil was still selling at One Hundred and Forty-Five Ghana Cedis, the imported products started selling at between One Hundred and Ten Ghana Cedis and One Hundred and Twenty Ghana Cedis.

“This situation adversely affected the local industry as local producers were faced with the concomitant effects of an unfair competition – a situation that was starting to result in job losses and loss of livelihoods of thousands of smallholder farmers in the value chain, not to mention the effect on investment and expansion of the sector,” he said.

However, “this move will guarantee the continuous employment and sustained livelihoods of a large number of Ghanaian farmers and value chain actors most of whom are smallholders as we look forward to the next big thing – the operationalization of the Tree Crops Development Authority,” he added.