Economic analysis of palm oil processing in Odogbolu Local Government Area, Ogun State, Nigeria

Abstract

The study analyzed economic implication of palm oil processing in Odogbolu Local Government Area, Ogun State, Nigeria. A purposive sampling procedure was employed to select 90 respondents for the study with the aid of a questionnaire. Data generated were analyzed using descriptive statistics, budgetary technique and regression analyses. The majority (81.10%) of the palm oil processors were female, 51.10% had no formal education and most (78.90%) of the processors used the traditional method of processing. The costs and returns analysis indicates that palm oil processing is a profitable venture with an average gross margin of ₦158, 404.00 and net return of ₦125, 301.00 per processing cycle. The profitability index (0.32) revealed that for every one Naira invested in the enterprise, a profit of 32 kobo was obtained. Furthermore, the regression analysis showed that the factors affecting net returns obtained from palm oil processing were processing method (p < 0.10), processing experience (p < 0.01), marital status (p < 0.01), education (p < 0.01) and household size (p < 0.05). It was concluded that palm oil processing is a profitable enterprise in the study area. Thus, the study recommends that processors should be educated on improved/modern methods of processing.