Three years ago, Olam International, a Singapore-based commodities trader, signed an agreement with Gabon’s government to invest almost $1bn in oil palm plantations. The ambitious deal, which aims to make the central African country, today a negligible producer of palm oil, the biggest on the continent by 2020, demonstrated the new-found interest from international investors in tapping Africa’s vast agricultural potential.
Rather than looking to sell its produce to Western markets or fast-growing ones in Asia and Latin America, Olam will target consumers in sub-Saharan Africa, where palm oil is part of some local diets and is used for heating and lighting. “All of that palm oil will go to the African market,” says Edward George, head of soft commodities research at pan-African lender Ecobank. “Nobody is talking of exporting it to Europe or Asia.”
