Palm Oil Business Made Simple – Even Your Kids Can Do It

Palm Oil Business Made Simple – Even Your Kids Can Do It
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One of the huge benefits of starting a Palm oil business is its lucrativeness. I spoke to a few local dealers on the business profitability and I was assured that you can make up to or more than 50-100%  on your return on investment (ROI) depending on the fruits availability and season. The palm oil fruit and final products are largely consumed in every home across Africa and around the world. I must admit it, palm oil gives both flavour and colour to many soups; you can also use it to fry fishes, plantain or local foods.

In Nigeria, no one knows the value of palm oil other than the native people of Ibibio in Akwa Ibom. It is so cherished that they’d prefer to have litres of palm oil stored rather than drive a Benz; when you give them palm oil as a gift, they appreciate it better. Some of the popular foods they spoil with palm oil include afang soup, edikang ikong soup and ekpang nkwukwor etc.

The popular use of the palm oil is not only limited to “food preparation”, it is also used for soap making and additives. A good number of consumers refer to it as “red oil” and the igbos refer to it as “Oyel”.

The export of the red oil and its products plays an important role in building the Nigerian economy. The sale of palm oil has turned countless people into wealthy people in our country.

Five states are the highest producers of red oil in Nigeria. These states are

  • Delta
  • Cross River
  • Akwa Ibom
  • Rivers and
  • Bayelsa

Their palm oil is simply the best.


how to grow palm oil in Nigeria

There are 4 major ways of doing this kind of business. These are:

  • Buying and storing to sell off at off-peak period.
  • Buying to sell immediately. This method allows you make faster sales resulting in more cash flow for you.
  • Another way is to buy and bottle them for retail sales.
  • Working as a sourcing agent. You can charge people as high as #200 per gallon.


By the time you are done with this article, you would have understood all that which is required to do the business, how to make big profits, locations to buy your red oil from, the different grades of palm oil, minor and major challenges of the business, how to increase your chances of getting customers as a newbie and all that is there to know about palm oil business.

You should be unique in your manner of bottling; only brandable container or bottle should be used, make your logo attractive, simple and appealing. If you plan to reach out to more potential consumers, 9 advise that you try out various sizes of bottles to discover the ones that sell faster.


  1. You need a storage house, shop or a space, where you can store the red oil before you finally sell them off or where your customers can shop for them. It should be in a location that is easily accessible.
  2. You should purchase gallons suitable for storing the purchased oil.
  3. Acquire proper training on ways to identify high quality oil. Find an experienced person whom and whom you trust to take you through palm oil business. He/she will be glad to share his/her knowledge with you.



You can begin running your business by first buying a few gallons, say like 10-20 gallons. So that selling won’t be a difficult thing to do. To save cost, you can buy re-used kegs if you are using gallons. You might find drums to be a whole lot cheaper when compared to gallons.


You must be able to identify good quality red oil from bad quality ones, this is the secret to you achieving success in the business. Because anybody you sell bad oil to will never want to buy from you again and will gladly tell others not to patronize you. But when you sell good oil to people, they will remain customers for life.

There are many cities to purchase your oil from. Some cities are: Ondo, Edo, Delta, Akwa Ibom, Cross River, Imo, Bayelsa, Anambra, Ekiti, Abia, Enugu Ebonyi, Rivers, and Ogun etc. The Southern part of Nigeria generally is blessed with lots of palm trees. In some parts of Nigeria like Akwa Ibom, palm oil plantation is an inheritance. A place like Ikono, Ekpo, Etim, and Ukanafun are well favoured by this.

The rise in population has caused many farmers to cultivate hybrid palm tree for commercial purpose.

The secret to Akwa Ibom great success is because of the good palm tree species they have and they do not mix the oil with other things.


how to identify good and bad palm oil

Grade 1: This is the best oil to sell commercially and to use for personal purpose; it can be stored for as long as 8 months or more. The grade 1 oil doesn’t sleep nor is it harsh, from the top to the bottom it remains the same. When you shake the container a little, the oil to flow freely; the taste is really good, has a beautiful fragrance and does not foam at the top like most mixed oil. In most cases, the colour is usually dark red.

Grade 2 This grade of palm oil can be stored for 3 to 4 months. The oil chokes and sleeps from the top to the bottom. In fact it is the direct opposite of the grade one palm oil.

Grade 3 This palm oil must be sold immediately or at most in a month’s time. It is majorly used in soap making.

Your nose is your best bet when it comes to distinguishing good oil from a bad one. You should dip your finger into the oil and smell.

At times, the colour of palm oil may not mean the oil is bad, for example there is a species palm tree called agric. It is not red coloured as the local one.


Get a 50cl bottle and fill with your best oil; then give them out as sample to retailers or palm oil sellers. At this time, you should not be focused on profit but concentrate on building customers. In as much as you your sample are of high quality, the palm oil marketers will be the ones to bring other buyers to you.

Before you begin to store the palm old, make sure you have at least one customer from the onset whom you can supply oil to, he/she will in turn refer others to you and the cycle keeps enlarging that way.


The price of oil totally depends on your location.  However never make the mistake of overcharging. Because you wouldn’t want to chase away customers with your extra high price. Remember it is a business and others are waiting to use their strategies to retain/woo customers.


It doesn’t matter if you start palm oil business small, medium or large, the cold truth remains that it is very profitable. People who store oil make big bucks in a sweep. In the year 2016, palm oil marketers sold their stored palm oil which they bought at the rate of NGN6,000 at NGN20,000 and above; that’s more than 100$% profit. Sometimes high demand of oil can spike the price up.

For those storing palm oil you don’t have to wait until the price hits the rock, you can start selling in batches so that if the price drops you won’t have to regret and if it increases you know you are still better off for it.

For example, if you buy and sell and you are opportune to be supplying about 2,000 gallons every month. 2,000 multiply by NGN1,000 will be 2 million every month that is how profitable the business really is. Let’s also assume you stored 200 rubbers and you made NGN10,000 as gain for each, the profit is also 2 million naira. This is why you should consider doing palm oil business today.

You can also opt to become an agent to distributors and wholesalers who will receive a commission of NGN300-NGN500 for every one gallon of palm oil you sourced for purchase. 8 gallons of 25 litres makes a drum.


You will agree with me that every business has its challenges; palm oil has its fair share of it.

Some of those challenges are:

  1. Identifying good oil: Your business will woefully fail if you are unable to identify good oil especially if you are storing. Bad oil will keep getting worse as it stays longer. As a result of that, you may find it difficult to sell and when you eventually do you might lose your capital and profits too.
  2. Unforeseen circumstances; Your ability ti supply your client at the agreed time this could be due to truck break down on the way, which do happened every now and then.
  3. Fluctuation in prices; palm oil prices suffers from frequent increase and decrease sometimes after agreeing on a certain price with a client, that price will jump up, it will take wisdom and good explanation to reach an understanding.
  4. Glu: this affects people who store palm oil mostly. In 2017 so many people stored oil thinking it will be like 2016. When people were making more than 300% profit. The product became too much available forcing the price to remain low as a result of that people who weren’t smart to observe the market loosed in the business.
  5. Importation: palm oil is being smuggled in illegally or imported from Malaysia and other neighbouring countries. These products flood the market and sell them out at a less price than our local oil.
  6. Selling on credit: Some customers will pressurise and beg you to sell on credit. If you do, getting your money back might be a challenge. Sometimes they pay you at their convenient time which could take forever. This can affect you negatively and run you out of business anymore.



the good quality palm oil

You should start buying the moment palm fruits are in abundance and the price is considerably low. This occurs most times between the months of January to March. Don’t wait until the price drops too low. Instead, buy in batches, little by little until the price finally drops. This way you will have nothing to lose even if the price doesn’t come down lower than you thought.


The perfect time to sell your palm oil is when the rains are coming down heavily and continuously. During this period, the palm trees bring out less fruit. In case the season decides to act crazy, you can begin sale during the month of September to December.  You can also sell when you see a sharp increase in the price of palm oil in the market.

NOTE: Be sure to always check and turn your stored oil at least once a month. You can easily do this by exposing them to the sun or by using a stick to stir. You should place the gallons on a wood or on something rather than place them on the ground.

Let’s have your questions in the comment box below, thank you.


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