Ethiopia’s oil seeds production to marginally decline due to drop in sesame production

ETHIOPIA – Ethiopia’s oil seeds production i.e., sesame seed, Niger seed, and soybeans in marketing year 2020/21 (October to September) is estimated to reach 705,000 metric tons, slightly down by 0.3 percent over previous year.

The production quantities of Niger seed and soybean during the period under review are estimated to increase by 2 and 14 percent, respectively, over last year’s level reaching 300,00 metric tons (MT) for Niger seed and 150,000 MT for Soybean.

Expansion in planted acreage and improved yield due to good weather conditions are set to propel the upward production levels, according to a GAIN report prepared by USDA Foreign Agricultural Services.

On the other hand, sesame seed production is estimated to decline by nearly 9 percent over the previous year to 255,000 MT due to a reduction in crop area and planting of alternative crops mainly sorghum to enhance food security.

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Ethiopia’s oilseed sector plays an important role in generating foreign exchange earnings and supporting the livelihoods of market actors across the value chain.

Oilseed crops are the third largest foreign exchange earners, next to coffee and cut flowers, contributing nearly 17 percent of Ethiopia’s agricultural exports.

In the 2019/20 marketing year (October to September), exports of sesame, Niger seed, and soybeans generated US$376 million in foreign exchange earnings.

A survey report of Central Statistics Agency (CSA) shows close to 1.4 million farmers produce oilseed crops in the country.

Local oil seeds consumption to rise in future

Despite Sesame seed being one of the most widely produced oilseed crop, representing 30 percent of Ethiopia’s oilseed production, its consumption is projected at 57,000 MT, down 4,000 MT over the previous year.

In fiscal year 2019/20 (July to June), Ethiopia imported palm oil, sunflower oil, and soybeans oil valued at nearly US$283 million

USDA Foreign Agricultural Services

While for Niger seeds, the post forecasts consumption to reach 288,000 MT, up roughly by 10,000 MT from the preceding year due to increased domestic demand for cooking oil.

Soybean consumption is projected to reach 64,000 MT and expected to continue its upward climb as consumers demand more soy-based edible oil and as the poultry sector demands more soybean meal.

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Looking ahead, overall oilseeds production and local demand is set to increase following the inauguration of Integrated Agro-Industrial Parks and entry of large-scale edible oil complexes in the market.

To this end sesame seed exports are forecast to reach 213,000 MT in MY 2020/21, declining slightly by 1,000 MT and Niger seed exports to remain unchanged at 12,000 MT.

For soybean exports are forecasts at 86,000 MT, up by 10,000 MT from the previous year’s export levels.

However, the crop’s exports could still face stiff competition from the local food processing industry, which has witnessed a rising demand for soybeans.

Cooking oil imports to decline in the long-term

With the rise in investment in local edible oil production, cooking oil imports are set to decline in the future, but in the short-term the country will still rely on imports as it builds capacity.

A new edible oil industrial complex began operations recently that could ultimately meet 60 percent of the country’s demand for cooking oils.

Furthermore, several other edible oil complexes are expected to commence productions by end of this year.

In the MY 2020/21, edible oils production is forecast at 63,000 MT against consumption of 630,000 MT, of which 90 percent will be imported.

In fiscal year 2019/20 (July to June), Ethiopia imported palm oil, sunflower oil, and soybeans oil valued at nearly US$283 million.

Of this imported edible oil, about 71 percent by value was palm oil, followed by sunflower oil (27 percent) and soybean oil (1 percent).

Ethiopia imports palm oil mostly from Indonesia (48 percent) and Malaysia (36 percent). On the other hand, the largest suppliers of sunflower oil to the Ethiopian market are Turkey (58 percent) and Ukraine (21%) while the leading suppliers of soybean oil are Ukraine and China (market shares of 33 and 26 percent, respectively).

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