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Kenya seeks Indonesia’s help to develop edible oil industry

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Kenya is targeting to establish large scale and outgrowth schemes in eight counties for the production of palm oil, sunflower oil and soybeans in collaboration with Indonesia.

Investments, Trade and Industry Cabinet Secretary Moses Kuria says 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.

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In a statement, Kuria said a delegation of leading Indonesian government and private firms is expected to meet President William Ruto and other members of the Executive for a joint discussion on full development of the edible oil industry which he says is currently being controlled by five companies.

“Kenya currently imports crude oil worth Ksh 140 billion ($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 litre forcing the government to import edible oil through the Kenya National Trading Corporation thus reducing the retail price by more than a half to Ksh 220 per litre,” said Kuria.

However according to the edible oil manufacturing sub-sector players under the umbrella of 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 3 years,” KAM said in a statement.

The 13 edible oil manufacturers currently have more than 2 million metric tonnes of edible oil per year against current market demand and consumption is about 800,000 metric tonnes (MT) per year, leaving an idle capacity of more than 1 million MT, as available.

KAM said of the total capacity, at least 25pc has been invested over the last 5 years alone from a total capital investment amounting to Ksh 100 billion made by the 13 companies who manufacture and process Crude Palm Oil (CPO), Crude Sunflower seed Oil, Crude Soybean Oil and Crude Corn Oil.

The Indonesian delegation which will include private companies in blue economy, mining, meat and livestock, textile and apparel and energy will be led by Minster of Maritime and Investment Affairs Luhut Binsar.

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