Kenya Association of Manufacturers (KAM) have called upon the government to urgently investigate reports of release of imported edible oils worth Ksh10 billion ($96.92 million) to the Kenyan public.
In a letter released by the KAM, the manufacturers were responding to media reports published on the 1st of August 2019 on the release of imported edible oils to the public stating that: “The Government of Kenya, through the fortification standards, requires that all edible oils imported or sold in the country are fortified with vitamin A to correct or prevent a demonstrated micronutrient deficiency,” the statement read in part.
The said consignment had been held at the port from May of 2018 due to concerns raised on required standards by the Multi-Agency Task Force.
“The Multi-Agency Taskforce’s objective is to ensure that goods coming into the country are of good quality, will not distort the market through unfair competition, and most importantly, are fit for human consumption,” KAM said in its statement.
The edible oil refiners in Kenya engage in the production of cooking oils, fats, edible oil, copra oil and corn oil among other oils. Some oil refiners are involved in the growing of vegetable oil crops by contracting and supporting small scale farmers in better farming methods and have further partnered with different agencies to improve small holder farmers to increase vegetable oil production.
In 2015 the manufacture of animal and vegetable fats and oils in Kenya increased by 6.5 per cent. The amount of processed vegetable oils increased by 12.2 per cent and that of vegetable fats grew marginally by 0.8 per cent. The edible oil sub sector in Kenya has an installed capacity of 1,307,000 MT/year and a production capacity of 755,000 MT/year. The total investment as at December 2015 stood at US$ 180 million while total import value for the sub sector is estimated to be US$ 25 million/year.
The reports have also indicated that the released edible oil lacks the required fortification, and have raised the issue with the storage of the oil at the port for a long period of time, which may have compromised its quality.
The basic raw material for the manufacture of edible oils is Crude Palm Oil (CPO), while those without capacity to fractionate may import the semi-processed CPO by-products namely Palm Stearin and Palm Olein. These are the main inputs in the manufacture of cooking oils and fats, soaps and detergents. In Kenya the mainstream manufacturers have invested heavily in production capacity and boast a substantial degree of value addition to raw materials (both imported and locally produced), in the production of their finished goods products.
“We ask that these allegations be urgently investigated and the required standards upheld in order to safeguard the health and safety of consumers in the country,” said KAM adding that it is also important that the matter is dealt with swiftly to prevent market distortion, by giving an unfair advantage to the imported edible oil. There is also need to ensure that any duties imposed on the imported oil are paid.
The manufacturers have also written to the Cabinet Secretary, Ministry of Industry, Trade and Cooperatives, Mr. Peter Munya, and requested him to reconsider this decision especially in light of the health and safety concerns of all citizens.
The lobby group has also written to the Cabinet Secretary, Ministry of Interior and Coordination of National Government, Dr. Fred Matiang’i in his capacity as Chair of the National Development Implementation Committee for the Big Four Agenda, to request for an urgent meeting on this critical issue.
“Most of all we look forward to swift and urgent resolution of this matter towards securing the health and safety of the nation, and to curtail similar incidences that may want to take advantage of this situation in the future,” the statement read.
According to a report released jointly by the KAM and Kenya Business Guide on Manufacturing in Kenya Under the ‘Big 4 Agenda’: A Sector Deep-dive Report there has been a rising demand for vegetable oils compared to vegetable fats over the years mainly due to health awareness and concerns. The edible oil manufacturers have invested approximately Kshs.1.6 trillion ($58.131 billion) in the edible oil industry, their turnover amounts to Kshs.110 trillion annually.
They have directly employed 7,000 employees and indirectly employed 23,000 employees in their supply chain links to the paper, plastic and transport sectors. They contribute 2 per cent to the country’s Gross Domestic Product (GDP). Kenya Revenue Authority collects taxes over Kshs.20B (Sh193.77 million) annually from the edible oil manufacturers.