01-02 Sep, 2016 - Abidjan, COTE D'IVOIRE
Radisson Blu Hotel Abidjan Airport
Radisson Blu Hotel Abidjan Airport
Despite four of Uganda’s biggest millers having set up vegetable oil processing plants with the capacity to convert locally produced oil seeds such as sunflower, soya, sesame and maize, imports of cheap crude palm from Southeast Asia are hampering local production.
According to recent customs data, Kenya, Tanzania and Uganda spent $2.2 billion on crude vegetable oil imports between 2013 and 2015. Independent policy analysts say that substituting these imports with locally produced oil seeds could translate to annual savings of $500 million in foreign exchange.
Back in the day when Jinja was Uganda’s industrial hub, towns like Kazimingi flourished, with smallholder farmers prospering by growing cotton and other oil seeds to feed the oil mills. Today, the oil seed industry no longer exists and Kzimingi is just one of the many ghost towns spread around Uganda.
Analysts say that if duty were to be imposed on palm oil imports, and incentives given to farmers and manufacturers, East Africa could once again grow its own oilseeds and develop a vegetable oil industry. Instead, most of the profits from the vegetable oil trade are enjoyed by two firms, Wilmar (an associate of Bidco) and Louis Dreyfus Commodities, who together control bulk liquid storage for crude palm oil. An industry player says that because the firms have a monopoly of local storage facilities, there is no level playing field nor any initiative to create an oilseed platform in East Africa.
For the last decade, Uganda has attempted to substitute imports with a massive palm oil project on the Ssese Islands of Lake Victoria. Both Wilmar and Bidco are partners in Oil Palm Uganda Ltd, the company commissioned in 2003 to develop a 40,000 hectare oil palm estate in Ssese for smallholders to grow oil palm. About $120 million was committed to the first phase, but Oil Palm Uganda has only developed 6,500ha of the land so far.
At the 4th Africa Palm Oil Value Chain, learn more about Oil Palm development in Uganda, from Connie Masaba, Ministry of Agriculture, Animal Industry and Fisheries, Uganda.
