A Malaysian-based edible oil dealer owning a manufacturing plant in Kenya says inadequate land may slow down the country’s plan for large-scale palm farming aimed at gradually substituting a Sh100 billion annual import bill.
Pacific Inter-Link (PIL) Group, which deals in bulk palm oil operations such as sourcing, refining and trading, says land around the lake region in western Kenya has been fragmented to levels that put into question the viability of large-scale farming of oil palm trees.
The Kuala Lumpur-headquartered firm whose presence in Africa includes operations in Ghana, Senegal, Angola and Algeria owns Golden Africa Kenya Ltd, the makers of Avena and Pika vegetable oil and bar soap brands Zenta and Saba.
“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.
“You need tens of thousands of acres of special quality soil with good rainfalls. You cannot expect that this tree will grow by itself. It needs a lot of watering.”
The Kenya Agricultural and Livestock Research Organisation (Kalro) studies have shown that the oil palm tree, introduced in Kenya in 2003, can grow along the Equator, particularly in western Kenya.
Kalro has further established that oil palm plantations can yield about 10 metric tonnes of fruit per hectare every year, higher than leading cash crops such as tea and coffee that yield less than eight tonnes on similar acreage.
The crop, whose fruit is refined into edible oil and by-products tapped for making soap and some cosmetics, is largely grown in western Kenya in small scale.
Investments, Trade and Industry Cabinet Secretary Moses Kuria has promised to reduce Kenya’s annual import of crude palm oil by facilitating farmers to grow the crop.
Mr Kuria said last on July 6, 2023, Kenya has opened talks with Indonesia, whose delegation of top government and private sector officials is expected in Nairobi next week, to support farmers through large-scale farming and an out-grower scheme such as the one used for sugarcane farming.
The government-backed plan targets farmers in the lake region counties of Homa Bay, Migori, Kisumu and Busia as well as Lamu, Kwale, Tana River and Taita Taveta on the Coast.
Indonesia produces nearly 60 percent of global palm oil followed by Malaysia, which makes up more than a quarter of the production, according to the US Department of Agriculture.
Kenya’s edible oil processors Bidco, Kapa Oil, Pwani Oil, Menengai and Golden Africa source the largest share of crude palm oil from Malaysia.
This was after Indonesia previously slapped protectionist tariffs on exports early last year following a biting drought in 2021 that cut production and resulted in high prices of the commodity across the world.
The value of imports from Malaysia, the bulk of which is crude palm oil, grew to Sh113.07 billion in 12 months through March 2023 from Sh106.47 billion, according to the Kenya National Bureau of Statistics.
Mr Saeed says the oil palm tree takes four to five years to mature and up to 10 years to reach full production potential, emphasising that Kenya’s palm oil import substitution is a long-term project.
Kenya is estimated to consume about 875,000 metric tonnes of edible oil yearly.