Economic Assessment of Palm Oil Processing in Owerri Agricultural Zone of Imo State

Abstract

The study was on economic analysis of palm oil processing in Owerri Agricultural zone of Imo State, it was designed to determine the costs and returns of palm oil processing in the area of study. Seventy five (75) palm oil processors were randomly sampled from the study location and a structured interview schedule was used in data collection. Profitability model specified as NR = P₁Q₁ – (P₁X₁ + FC), percentages and ordinary least square (OLS) multiple regression model specified as Y = f(x₁, x₂, x₃, x₄, x₅, x₆, x₇, e) were employed for data analysis. Results showed that the net returns of palm oil processors is significant at 5% level and therefore profitable since every N1.00 invested in processing 1 tonne fresh fruit bunch (FFB) has a return of N1.10. Inadequate palm fruits, poor transportation services and irregular water supply were major constraints identified to have affected the processors. The study recommends assistance of Nigeria Institute for oil palm Research (NIFOR) to ensure adequate supply of improved varieties of Oil Palm fruits to the target population. The government should also ensure adequate provision of transport services and other infrastructures that could easy palm oil processing.