MALAYSIA is keen to grow its palm oil exports to Kenya to help the country maximise its edible oil refining capacity, the country has said.
This, even as it commits to support Kenya with local palm oil production to reduce reliance on imports, primarily from Indonesia and Malaysia (99%).
Speaking in Nairobi yesterday, Malaysia’s Minister for Plantation and Commodities, Johari Ghani, said his government is willing to share seeds and expertise in palm oil production even as they explore a strategic collaboration in edible oil value chain with local industries, and support Kenyan exports to the country.
“We will be setting up a trade support office in Nairobi to address any challenges being faced by Kenyan imports and equally to support exporters to trade with Malaysia. On local production, we are willing to support the Kenyan farmers to produce and manufacturers enhance their production for both the local market and re-export to the East African region,” Ghani said.
The minister who was in the country on a two-day official visit held talks with the Kenya association of manufacturers on maximising opportunities for both countries.
Apart from palm oil, Kenya also imports refined petroleum and stearic acid. Other significant imports from Malaysia include telecommunications equipment, electronic and electrical goods, industrial machinery and furniture.
Last year, Kenya imports from the country were valued at Sh135.9 billion up from Sh120.5 billion the previous year.
Exports are mainly coffee, tea, ores, live plants and processed foods.
Kenya
imports palm oil, a key edible oil, to meet its domestic demand, which
outstrips local production.
The
imported palm oil is primarily used in the manufacturing of cooking oil
and also as an ingredient in various food production, household goods
like soap and some cosmetics.
According to the
Kenya Association of Manufactures (KAM) Kenya’s edible oil
refining capacity stands at approximately 2.1 million metric tonnes per annum. However, the industry is currently operating at only
about 40 per cent
capacity. “There
is opportunity to enhance capacity utiliSation and scale up production to meet
national demand,” KAM chief
executive Tobias Alando said. Kenya currently does not produce the raw materials
required for edible oil manufacturing, relying heavily on imports. There is an
opportunity to boost local agricultural production by supporting farmers to
cultivate oilseed crops used in edible oil processing, KAM said. National demand exceeds 900,000 metric tonnes annually, with the bulk of
consumption met through imports. Key industry challenges
include limited market access for local producers, high cost of production, inaccessible credit for businesses and
farmers and ddelayed
payments for supplied finished products. The government has
been keen on localising the edible oil value chain with the aim to
safeguard domestic industries. In alignment with this national agenda, KAM reaffirmed
its commitment to fostering strategic partnerships and policy interventions
that will not only strengthen the edible oil value chain, but also drive value addition,
create employment and enhance food security through increased local production. The government aims to
cultivate palm trees in specific counties, particularly in the lake region and along the coast, to achieve self-sufficiency in edible oil. This initiative involves large-scale farming and out-grower
schemes, potentially supported by international partners like Malaysia.
