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The Nairobian

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Edible oil processors rekindle push to scrap import duty tax

Business

By Graham Kajilwa | Apr 03, 2025

**L-R: Datuk Robert GSI Malaysia,Bidco Chairman Vimal Shah,Dr. Dorcas Mbithe senior lecturer Kenyatta University & Neev Shah KAPA Oil during Malaysia Palm Oil technical seminar 2025 on 2nd April 2025.** [Wilberforce Okwiri,Standard]

Players in the edible oils sector are doubling down on the push to compel the National Treasury to scrap the 10 per cent import duty on crude palm oil.

This is even as Malaysian firms court local processors as they seek a foothold to expand to the rest of the region.

The introduction of the 10 per cent duty in June 2024 was part of the harmonisation efforts of taxes across the East African Community (EAC) in line with the bloc’s Common External Tariffs (CET).

However, Bidco Africa Chair Vimal Shah said yesterday the move had made cooking oil expensive, considering that Malaysia in December 2024 raised its export duty on crude palm oil from eight to 10 per cent in December 2024 .

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This was meant to protect its industry and grow job opportunities. Mr Shah said Kenya should also implement policies that would stimulate the large-scale production and processing of palm oil.

“We need a [palm tree] plantation of a minimum 25,000 acres, a nucleus plantation, and an outgrowers system also. That is where the opportunity lies,” said Mr Shah on the sidelines of a technical seminar on palm oil by the Malaysian Palm Oil Council (MPOC) in Nairobi.

He said Malaysia imposed an export duty on crude oil in an attempt to preserve jobs by ensuring it only exports refined cooking oil.

“By only imposing a 10 per cent duty, we have made the product more expensive for Kenyans, and that is where we’ve gone wrong,” he said.

Mr Shah views Malaysia’s interest in deepening trade ties with Kenya as an opportunity to grow the edible oils sector, which has stagnated, according to government data.

“The opportunity for us in Africa is that they have run out of land. We could look at it and say, how do we establish plantations not only in Kenya but across East Africa? We have already demonstrated this as a company—we have plantations in Uganda,” said Mr. Shah.

Theventharan Batumalai, Regional Manager of the Malaysian Palm Oil Council (MPOC) for sub-Saharan Africa, emphasised Kenya’s significance as a market for Malaysia.

“In 2024, Kenya was the fourth-largest importer of Malaysian palm oil. This year, it is the second-largest trading partner for Malaysia in the palm oil sector,” he said.

He noted that Kenya’s manufacturing sector holds great promise, offering opportunities for collaboration as Malaysia looks to expand its market beyond Kenyan borders.

“We see Kenya as a potential gateway to the East African Community. The country has a lot of potential as a manufacturing-driven economy and is one of the most advanced in the African market,” he added.

Collins Marangu, Kenya’s Agriculture Secretary, stated that palm oil is one of the key crops in the government’s plan to revive the once-booming edible oils sector. Other crops under focus include canola and sunflower.

He pointed out that the current supply of edible oil crops is unsustainable due to seasonality challenges. “Processing industries require a continuous supply of raw materials, which is a challenge given Kenya’s heavy reliance on imported oil products such as sunflower, coconut, and canola,” said Mr Marangu, whose speech was read on his behalf.

In 2023, Kenya imported 798,580 tonnes of edible oils valued at Sh102 billion.

Annually, the country imports crude palm oil worth Sh130 billion.

“Crude palm oil from Asian countries accounts for the majority of the import volume and value, with approximately 95 per cent coming from Malaysia and Indonesia,” he said.

Mr Marangu highlighted that Kenya has significant potential for palm oil cultivation in select counties, including Lamu, Kwale, Tana River, Taita Taveta, Homa Bay, Migori, Kisumu, and Busia.

This can be achieved through both outgrower schemes and large-scale plantations. “According to our data, Kenya currently has about 130,000 palm trees, producing approximately 13.7 million tonnes of fresh crude, which is processed to extract oil,” he noted.