ABSTRACT
The study was carried out on profitability analysis of palm oil processing in Edo State, Nigeria. The aim of the study was to identify the socio-economic characteristics of palm oil processors, determine the costs and returns of palm oil production, examine the factors influencing the profitability of palm oil production and ascertain the constraints to palm oil production in Edo State. Data were collected using questionnaire. The sample size consists of 100 respondents. Descriptive statistics and inferential statistics were used to analyse the data collected from the respondents. The result showed that majority (53.0%) of respondents were male with processing experience of 13 years and majority (87.0) of the respondents had no access to extension training service. The factors influencing the profitability of palm oil processing were Transportation Cost, processing cost, fresh fruit bunch, availability of input, availability of capital, trade union and storage cost. The major constraints were bad state of road, inaccessibility to credit and high cost of labour. The result showed that the value of R2 was 0.8471. This means that the independent variables that are included in this model show a total of 84.71% variation in profitability of oil palm processing in the study area. The coefficient of processing cost, changes in price, availability of input, handling cost, availability of capital were positively significant at 5% level. The total cost incurred from the palm oil processing was N60, 672.95k. The cost was incurred from market levy (N1, 771.50k), cost of transportation (N6, 654.00k), offloading and loading cost (N3, 777.00k). The total revenue amounted to N 12, 4676.05 kobo. The profit to total cost ratio was N2.05kb which implied that every N 1 spent on palm oil processing generated a profit of N 2.05. Based on the result, the following recommendations were proffered, Government and concerned organizations should help farmers to have access to improve modern facilities and Government should provide soft loan to assist the respondents since oil palm processing is labour intensive.
