KAM Proposes Measures to Lower Cooking Oil Costs To Boost Local Manufacturing

Editorial Desk
By Editorial Desk 4 Min Read

In a bid to find a lasting solution to the high cost of cooking oil, the Kenyan edible oil manufacturing sector has put forth recommendations aimed at lowering prices and supporting local manufacturing.

The industry, represented by the Kenya Association of Manufacturers (KAM), is urging the government to consider and engage in measures to enhance local and regional competitiveness.

The edible oil sub-sector, which comprises over 13 local companies, has invested over KES 100 billion in the past five years, demonstrating its commitment to growth. With a combined processing capacity of 7,160 Metric Tonnes per day, these companies are well-equipped to meet the market demand of 800,000 MT per year.

Not only does the industry provide high-quality edible cooking oil, vegetable fat, margarine, and soap, but it also plays a vital role in job creation. Over 10,000 people are employed directly by the sector, with an additional 100,000 jobs supported in farming, transport, packaging, and distribution. Moreover, the industry supports an additional 32,000 jobs in supportive industries such as packaging and manufacturing.

The sector acknowledges the positive impact of government interventions, particularly the stay application of the East African Community Common External Tariffs (EAC CET) in 2018. This policy has successfully restricted undervalued goods from cheap subsidized imports, fostering significant growth for the local industry.

The industry expresses gratitude for the extension of the stay order, recognizing its contribution to the promotion of local manufacturing.

To further enhance the industry’s growth and ensure sustainable pricing, the sector proposes several measures. Firstly, the industry supports the backward integration and cultivation of oil palm in Kenya.

It requests the government to allocate suitable land for palm growing, enabling the private sector to attract investments through public-private partnerships. This initiative would prioritize infrastructure development and job creation, fostering economic growth and supporting local manufacturing.

Additionally, the sector suggests utilizing the existing 2% National Oil Corporation of Kenya (NOCK) levy to develop palm, soya, and sunflower farming, as initially envisioned. By harnessing the potential of these crops, the industry can diversify its sources and reduce dependence on imported raw materials.

The industry also appreciates the government’s decision to continue the stay of application of tariffs on ready-made refined imported oils from outside the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA).

However, it recommends retaining the tariff at 35% as a means of protecting local manufacturers and creating a level playing field for all stakeholders.

By partnering with the government and engaging in dialogue, the Kenyan edible oil sector believes that the country has a golden opportunity to promote industrialization and support local manufacturing. This collaboration is essential, especially during times when bolstering local production and value addition is crucial.

The industry’s recommendations aim to lower the cost of cooking oil, ensure sustainable growth, protect jobs, and support economic development through value addition. By embracing the spirit of “Buy Kenya, Build Kenya,” the government can foster a conducive environment for local manufacturers, ultimately benefiting the general public and vulnerable populations.

In conclusion, the Kenyan edible oil sector calls for the government’s consideration and engagement in implementing the proposed measures. With collective efforts, the industry believes that a sustainable solution can be achieved, leading to lower cooking oil costs, job creation, and economic stability.

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