The Liberian government predicts that palm oil will replace iron ore as one of the country’s main export commodities after prices for the base metal collapsed over the past three years. During the period, Liberia’s economy has come to a virtual standstill mainly because of the Ebola outbreak and the slump in key export commodity prices.
Benchmark iron ore prices have slumped from around $110 per tonne on 1 December 2013 to reach the nadir of $42 per tonne on 1 December 2015. The price for the steel-making ingredient has recovered somewhat this year, climbing to $64.98 per tonne on 1 November 2016.
Meanwhile, rubber, Liberia’s primary export commodity, has seen its prices on the Tokyo Commodity Exchange fall from $282.90 per five tonne lot on 20 December 2013 to $192.10 per five tonne lot on 8 November 2016. However, palm oil production could help to revive the West African country’s economy, and eventually employ more than 100,000 people, Liberian deputy minister of industry Ellen Pratt told Bloomberg.
“Liberia’s climate is one of the best for production of oil palm and similar to the climatic conditions of Southeast Asia,” she said. “If only 25% of concessionary land is planted, oil palm exports can equal iron ore exports.” Indonesia and Malaysia account for around 85% of global palm oil production.
In Liberia, meanwhile, Malaysia-based Sime Darby Bhd and Golden Veroleum Ltd, the subsidiary of the U.S.-based company Verdant Fund LP, have been granted concessions to plant more than 870,000 hectares of palm trees, creating over 70,000 new direct jobs, according to Pratt. The separate deals come as Liberia’s government targets growth to reach 6% from 2018 to 2025, following the three years of stagnation. The West African country also hopes to raise $1.3bn mainly from World Bank and the International Monetary Fund (IMF) to boost the economy.