Government rethinking ban on private palm oil imports

ETHIOPIA – The government is reconsidering its ban on private companies importing palm oil, which has been in place since May 2011.

The embargo was placed after the government failed to control the edible oil market with a price cap it had introduced between January and May 2011. The price cap was introduced on 18 items, including sugar and wheat.

The government started taking over all of the oil that traders had at the Port of Djibouti, compensating the traders only for the costs they had incurred. At that time there were six major importers including Al-Sam International and Get-AS International, which imported 13 million litres of palm-oil annually.

The government also imported a total of 70,000tn between June and July 2011.

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For the past two weeks, the Ministry of Trade (MoT) has been reconsidering the return of private businesses into the importation of oil, although the idea has always been in the air, according to Ali Siraj, state minister for Trade, “bearing in mind the country’s free market policy” he added.

The Ministry is now considering the economic impact of allowing private businesses to import edible oil, and its study will first be shared with the Ministry of Finance and Economic Development (MoFED) and the Council of Ministers before any decisions are made, Ali said. He gave no specific time when decisions would be made.

Sabir Argaw, Al-Sam International’s manager, said that he was not aware of what was happening at the Ministry of Trade and that no one from the government had contacted him on the issue.

Pulses and oilseeds are ranked the second and third most important crops in Ethiopia, both in terms of land use and production. In the 2013/14 fiscal year, the total pulses production had reached 28.6 million quintals and oilseeds production amounted to 7.1 million quintals.

However, Ethiopia mainly relies on imported palm oil from countries like Indonesia, Malaysia and Singapore in order to satisfy its edible oil consumption, having 20pc of the total consumption covered by a few domestic manufactures with low level of production capacity.

In 2014, Ethiopia imported 340,000 metric tonnes of palm oil showing growth of around three percent from the previous year, according to Unites States Department of Agriculture.

In the current, budget year, the Public Procurement and Property Disposal Service, on behalf of Merchandise Wholesale and Import Trade Enterprise has floated a tender for the procurement of 453,600 metric tonnes of Palm Oil, which is yet to be concluded.

May 4, 2015; http://addisfortune.net/articles/government-re-thinking-ban-on-private-palm-oil-imports/

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