In recent years, Malaysia and Kenya have shown a growing interest in exploring potential areas of cooperation, particularly in the agricultural sector. One significant aspect of this collaboration revolves around palm imports. Malaysia, one of the world's largest producers and exporters of palm oil, is now seeking to strengthen its ties with Kenya. The exploration of this cooperation between Malaysia and Kenya on palm imports holds promising prospects for both nations. This article delves into the significance of this collaboration and its potential benefits.
As we know, Palm oil is an essential agricultural commodity that plays a vital role in the global economy. It is extensively used in various sectors, including food processing, cosmetics, and biofuel production. Malaysia has long been a dominant player in the palm oil industry, accounting for a substantial share of the global palm oil market. On the other hand, Kenya possesses vast agricultural resources and has the potential to become a significant palm oil consumer in the African region.
Kenya heavily relies on Asia, particularly Malaysia, for its palm oil imports. Based on Kenya's palm imports in 2022, the mutual business relationship between Malaysia and Kenya reached $1.19 billion, solidifying their partnership. Asia, as the primary source, provides 95% of Kenya's crude palm imports, making Malaysia a key player in the region.
Kenya's dependence on imported palm oil makes it vulnerable to global supply chain disruptions and price fluctuations. By analyzing import-export shipment data, industry players can anticipate external shocks, enabling them to make informed decisions and safeguard the local market from sudden price surges.
To reduce reliance on imports and stimulate domestic palm oil production, players in Kenya's edible oil sub-sector are seeking collaboration with Malaysian authorities. The Malaysian Palm Oil Council is actively showcasing Malaysian expertise through events like the East African Summit held in Nairobi. This collaboration aims to develop local palm oil plantations and strengthen Kenya's position in the palm oil industry.
The demand for palm oil and its derivatives, such as crude palm oil (CPO), crude palm olein (CPL), and cooking oil, is growing in the Sub-Saharan Africa region. Kenya, as a major importer of Malaysian Palm Oil (MPO) in the region, presents significant opportunities for both Malaysian and Kenyan palm oil sellers. The forum, featuring local industry players and international experts, serves as a platform for exploring new avenues and partnerships.
While the palm oil industry in Kenya shows great potential, challenges remain. The volatility of the exchange rate and its impact on pricing are concerns that investors and industry players raise. Moreover, maintaining a favorable excise duty sector is crucial for enhancing local production.
According to a Kenyan edible oil distributor with a manufacturing facility in Malaysia, insufficient land may hinder the nation's goal for extensive palm production, which aims to progressively replace a Sh100 billion annual import cost.
According to the Pacific Inter-Link (PIL) Group, the area surrounding the lake region in western Kenya has been fragmented to such an extent that it calls into question the viability of large-scale oil palm tree farming. This group deals in bulk palm oil operations such as sourcing, refining, and trading.
Avena and Pika vegetable oils, bar soap brands Zenta and Saba are produced by Golden Africa Kenya Ltd., a company with its headquarters in Kuala Lumpur and activities in Ghana, Senegal, Angola, and Algeria.
“Oil palm tree plantations need big acreage. You can’t just have a garden and call it a plantation,” Fouad Hayel Saeed, the chairman of PIL Group, said in Nairobi.
However, research conducted by the Kenya Agricultural and Livestock Research Organization (Kalro) has demonstrated that the 2003 introduction of the oil palm tree to Kenya may thrive along the equator, notably in western Kenya.
According to Kalro, oil palm plantations can produce more fruit annually per hectare than other major cash crops like tea and coffee, which produce fewer than eight tonnes on an equivalent amount of land.
Based on Kenya Import data, the value of imports from Malaysia, the majority of which is crude palm oil, increased from Sh106.47 billion to Sh113.07 billion in the 12 months leading up to March 2023.
According to Mr. Saeed, the oil palm tree matures in four to five years and can take up to ten years to reach its maximum output potential. He emphasizes that Kenya's ambition to replace its imports of palm oil is a long-term one. An estimated 875,000 metric tonnes of edible oil is consumed in Kenya each year.
Import-export shipment data is a valuable tool for understanding and strengthening Kenya's palm oil industry. The growing trade relationship between Kenya and Malaysia, driven by import-export data insights, opens opportunities for collaboration and local palm oil production. By leveraging our Kenya Trade data, industry players can navigate market fluctuations, reduce dependence on imports, and explore new avenues for expanding the edible oil and palm oil businesses. However, if you have any queries related to Kenya import export data or palm import data, please visit the KenyaTradeData.com platform to discover the global market insights at your fingertips
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