Players in Kenya’s edible oil subsector are seeking for areas of collaboration with the Malaysian authorities in developing local palm oil plantations.
The Asian nation is in the meantime looking to export more palm oil to Kenya, at a time that mutual business relationship between Malaysia and Kenya, hit $1.19 billion (Sh167 billion) in 2022.
Kenya has been among the leading importers of palm oil from Malaysia in the region with plans at an initial stage to grow local production.
Kenya sees this a cushion to external shocks that impact prices of the commodity in the local market.
This comes at a time that the prices of palm oil have skyrocketed due to disruptions in the global supply chain.
In an effort to showcase Malaysian expertise in palm oil production, the Malaysian Palm Oil Council is holding an East African summit in Nairobi.
Speaking during the summit, Malaysian deputy prime minister Fadillah Yusof underscored the importance of the Malaysia-Kenya trade relationship, observing that Kenya is a vital market for Malaysian palm oil in the East Africa region.
“Today’s event underscores the importance of Kenya as a trade partner. Kenya holds immense significance in the palm oil industry as demonstrated by statistics as the fifth largest destination for our nation’s palm oil export with a volume exceeding 763,000 tons in 2022,” said Yusof.
The council revealed that 95 percent of Kenya’s crude palm imports comes from Asia.
Kenya continues to be a major importer of MPO in Sub-Saharan Africa (SSA) with a volume of 255,253 metric tonnes which is 27,732 metric tonnes or 12.2 percent higher compared to the same period in 2022.
Kenya’s import of Malaysian Palm Oil also represents 26.4% of the total MPO volume exported to the region.
The increase in demand for Crude palm oil (CPO), crude palm olein (CPL), and cooking oil, as the main palm oil products to the SSA region, has provided a ready market for the Malaysian palm oil sellers.
The major importers of cooking oil in Africa include; Benin, Togo, Mauritania, Tanzania, Cote D’Ivoire, Kenya and Senegal. They account for 23% of the total palm oil imported by the region.
The forum also featured prominent local industry players and international experts from Malaysia, Europe, and Kenya.
Former Mandera Senator Billow Kerrow, who is an investor in the sub-sector, said that, the exchange rate that has seen the shilling shed about 30 percent of its value in the two years is a concern that should be adressed.
Bidco chairman Vimal Shah, called on the government to keep the excise duty sector favourable in order to enhance more production.
In 2021, Kenya imported $1.26 billion (Sh177billion) worth of palm oil, becoming the 9th largest importer of palm oil in the world.
Subsequently, palm oil was the second most imported product in Kenya from Malaysia, Indonesia, Thailand, Singapore, and the Philippines.
The Minister encouraged the private sectors of both Malaysia and Kenya to seize the numerous opportunities in downstream higher value-added palm derivatives.
He called for partnerships and strategic alliances to explore new avenues for expanding the edible oil and palm oil business, particularly in areas such as oleochemicals, pharmaceuticals, processed foods, specialty products, and consumer brands.