KENYA- East Africa’s largest economy by GDP, Kenya, is targeting to establish large-scale and outgrowth schemes in eight counties for palm oil, sunflower oil, and soybeans production in collaboration with the Indonesian government.
According to the Investments, Trade, and Industry Cabinet Secretary, Moses Kuria, the partnership with the world’s largest edible oil producer will help Kenya attain edible oil sufficiency and cut the huge import bill the commodity attracts.
In a statement, CS Kuria said a delegation of the Indonesian government and leading private firms will soon be meeting President William Ruto and other members of the Executive for a joint discussion on the full development of the edible oil industry, which he says is currently being controlled by five companies.
The Minister of Maritime and Investment Affairs, Luhut Binsar, will lead the Indonesian delegation and will include private companies in different sectors interested in investing in Kenya’s edible oil industry.
According to CS Kuria, Kenya imports crude oil worth Ksh 140 billion (US$1b) annually through five companies of Bidco, Kapa Oil, Pwani Oil, Menengai, and Golden Africa.
“Last December, there was an outcry from consumers when the prices of edible oil skyrocketed to Ksh 480 per liter forcing the government to import edible oil through the Kenya National Trading Corporation thus reducing the retail price by more than half to Ksh 220 per liter,” said Kuria.
However, according to the edible oil manufacturing sub-sector under the Kenya Association of Manufacturers (KAM), the price increments have largely been due to movements in international prices.
“….driven by intense but positive competition, it is our position that local market prices always move based on international market forces and prevailing foreign exchange rates and not any other factors as evidenced in price trends over the last three years,” KAM said in a statement.
According to Triton Market Research, the market for edible oil in Kenya is likely to witness a CAGR of 13.37% based on revenue and 4.75% based on volume over the forecast period 2023-2028.
Therefore, investments into the local production capacities for edible oil are paramount to ensuring that the growing demand is met locally and that Kenyans are not over-reliant on imports.
According to KAM, over the last 5 years alone a total capital investment amounting to Ksh 100 billion (US$7.1 billion) was made by the 13 companies that manufacture and process Crude Palm Oil (CPO), Crude Sunflower seed Oil, Crude Soybean Oil, and Crude Corn Oil.
There is potential for continued investment into the sector, and collaborations with countries like Indonesia can bolster the edible oils industry in Kenya.