Cheap imports are undercutting the oil palm business for Okomu Oil and Presco

Palm oil is the lifeblood of many Nigerian households and industries, it is in our cooking, our soaps, our cosmetics, and even our animal feed. Yet, the local giants that produce it are currently facing a tough reality check.

Following recent changes to import duty policies, cheaper palm oil from Indonesia and Malaysia is flooding the Nigerian market. For the everyday consumer, cheaper goods might seem like a win, but for our local agribusiness champions ‘’Okomu Oil’’ and ‘’Presco’’ this influx is heavily undercutting their pricing power, leading to their weakest revenue growth in years for the first half (H1) of 2026.

The Current Market Reality Between them, Presco and Okomu generate over 99% of the revenue in Nigeria’s corporate palm oil sector. While they are still producing healthy volumes from their plantations, they can no longer dictate prices the way they used to. The influx of cheaper Asian imports is forcing them to absorb the impact to stay competitive.

Here is how the pressure is reflecting in their H1 2026 financial scorecards:

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| Metric | Presco | Okomu Oil |
| H1 2026 Revenue| ₦198 Billion (Flat / 0% growth) | ₦125.3 Billion (Declined by 3.5%) |
| Pre-Tax Profit | Rose by 9.2% | Declined by 12% |
| Gross Profit Margin| 83.4% | 64.4% |
| Market Capitalisation | ₦2.4 Trillion | ₦1.35 Trillion |
| Share Price / P.E. Ratio| ~₦2,070 (19.6x) | ~₦1,418 (26.9x) |

In the same period last year (2025), both companies were celebrating triple-digit profit growth. For Presco, this flat revenue marks the first time since 2018 it hasn’t seen top-line growth in this period.

Why Did Presco Handle the Shock Better Than Okomu, While both companies are feeling the heat, Presco has shown a bit more resilience. The secret lies in how their businesses are structured:

Going Beyond the Farm (Vertical Integration), Okomu relies heavily on selling raw Crude Palm Oil (CPO) and makes about 90% of its sales directly within Nigeria. When local CPO prices drop, Okomu takes a direct hit. Presco, on the other hand, refines its CPO into finished vegetable oil products. By capturing value further down the production chain, Presco created a cushion for its profits.

Presco doesn’t just rely on the Nigerian market; its operations in Ghana help balance out the shocks happening back home. In fact, despite its overall revenue remaining flat, Presco’s standalone Nigerian revenue actually grew by 12.4%.

Aggressive Debt Reduction, Presco used this period to clean up its books, paying off a massive ₦197.3 billion in loans. This brought their debt down to ₦119.5 billion, leaving them in a net cash position with ₦129.9 billion in the bank, allowing them to confidently declare a ₦10 per share interim dividend.

Okomu, to its credit, still maintains an incredibly healthy balance sheet. With only ₦3.9 billion in long-term debt against ₦21.4 billion in cash, it is fundamentally sound, even if its earnings are currently more vulnerable to the price wars.

The Big Picture for Nigeria

This situation highlights a classic Nigerian economic paradox. We have one of the highest per-capita consumption rates of palm oil in the world, yet our local producers can only meet about ‘’40% of domestic demand’’. We are heavily dependent on imports just to bridge the 60% gap.

Because of this supply gap, government policies on agricultural incentives and import duties are make-or-break for local competitiveness. The industry is already warning that if this high volume of cheap imports continues into the second half of 2026, local CPO prices will remain depressed.

The next few months are a major stress test for these local champions. If import dynamics stabilize and domestic prices recover, both Presco and Okomu are well-positioned to bounce back. Until then, Presco’s downstream refining strategy is proving to be the better shock absorber in a highly competitive Nigerian market.