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Cameroon – Agribusiness: Socapalm wants the government increase the price of raw palm oil by 30%

Socapalm maneuvers to the government to obtain a rise of more than 30% on the price of palm oil
Written by Deckson N.

On May 11, 2017, the Director General of the Société camerounaise de palmeraies (Socapalm), Dominique Cornet, applied to the Cameroonian Minister of Trade, Luc Magloire Mbarga Atangana, for a request to obtain from this member of the Government responsible for the registration of prices of certain consumer products, a substantial increase in the price of the sale of crude palm oil to processing industries and households.

Arguing that the prices of raw palm oil have been blocked in the country for 10 years, the CEO of Socapalm, a company controlled by the Franco-Belgian Socfin group, proposes to increase the price of the tonne between 450,000 and 600,000 FCFA excluding tax, which would lead to an increase of more than 30%. According to the Association of Oil Refiners of Cameroon (Asroc), this increase is expected to impact household prices, which would increase from CFAF 600 per liter to CFAF 750, an increase of 25%.

According to Socapalm, the need for this upward revision of prices is justified by the increase in its costs, the desire to bail out the company’s funds to launch an investment plan, or the increase in the sale price of the tonne on the international market to 843 dollars in the first quarter of 2017. So many justifications swept aside by the Asroc.

On the basis of a trend of world prices for crude palm oil over the period from 3 January to 20 June 2017, Asroc observes that “contrary to the allegations of Socapalm, Average price of the sale of the tonne of crude palm oil in the first quarter of 2017 is 712.52 dollars and not 843 dollars “as claimed by the leader of the production of crude palm oil in Cameroon.

The consolidation of the local refiners also indicates that Socapalm, which announces a new investment plan, has not already respected the plan produced in 2008, which enabled her to obtain an increase in the sale price of crude palm oil from 360 to 450 CFA francs per kilogram. Instead of the planned expansion of plantations, with a view to increasing production, Asroc even reveals that Socapalm used the funds raised by the latest price increase to develop Hevea plantations, to the detriment of the oil palm.

In response to Socapalm’s rising costs, which would raise financial difficulties for the company, Asroc recalls that this agro-industrial unit declared “a gain of 6 billion CFA francs in 2016, 5 billion CFA francs as a dividend “. In fact, Socapalm declared, by the end of 2016, after-tax profits of CFAF 5.1 billion, a decrease of more than CFAF 1 billion compared to CFAF 6.4 billion for the year 2015. According to the company’s financial statements, the dividend to be distributed amounts to 6.8 billion CFA francs, Socapalm having decided to carry out a deferral of its “retained earnings” stock, in order to complete the envelope to be distributed to shareholders for the 2016 financial year.

On June 27, a meeting on the subject was held at the Ministry of Trade. The following day, correspondence from the Prime Minister’s office was transmitted to Minister Mbarga Atangana, for a record of the “denunciations” it contains. The correspondence, written on 13 June by an NGO called the Observatory of Societal Development, accuses the Minister of Trade of damaging palm oil producers by allowing imports, whereas, according to the NGO, local production is “sufficient“. Yet experts agree that Cameroon’s production deficit, which peaked at 100,000 tons for years, has reached 130,000 tons for two years.

Better still, the NGO, whose correspondence addressed to the Prime Minister on 13 June, is accompanied by the letter sent on 11 May to the Minister of Trade by Socapalm, that asks the government to grant the market leader oil Palm in Cameroon, a substantial increase in the price of raw palm oil in the country.

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Deckson N.