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Rising potential
A rapidly growing population
is fuelling African demand for
vegetable oils, with an import
boom expected in the next few
years. Where the additional
imports will come from and what
oils they consist of will depend emerging markets, but East, West and central West Africa, where 68% of production is related to
on the target region Africa are lagging behind,” he says. palm oil.
In 2016, per capita consumption in North and However, Rabobank does not expect significant
southern Africa stood at around 24 and 21kg/ growth in local oil production. “At the moment,

E
merging markets hold globally person, respectively. In the rest of the Africa, palm production in Africa is not really taking off
dominating positions in both oilseeds consumption figures were much lower, with West for a number of reasons,” Martielli says. “Factors
and grains origination and as trade Africa reaching 12kg/person and Central and East such as highly fragmented palm plantation
destinations, a situation that stands true Africa both below the 10kg line at approximately structures, low yields of around 0.6tonnes/ha, lack
for – among others – soyabeans, palm 8 and 6kg/person, respectively. On a global scale, of tropical conditions needed for palm growing, and
oil and wheat. China, for example, has become a North Africa accounts for 2.5% of total global difficulties in attracting and retaining work force
key trading partner for Brazil, replacing the EU. vegetable oil consumption, while Sub-Saharan are some contributing factors. Also, Africa’s low
Southeast Asia is producing more and more palm Africa together racks up 4.9% of the global total. rank in terms of the ease of doing business hampers
oil and has begun to engage more closely with India investments.”
to offload its supply. Consumption ahead of production Consumption, on the other hand, is expected to
Africa is also bursting into the global market, skyrocket in West Africa alone from 4.1M tonnes
Rabobank’s director of grains and oilseeds, Vito But Martielli says this pattern is about to change. in 2016 to nearly 6M tonnes by 2030, followed by
Martielli, told the audience at the Palm & Lauric Within the next 10 years, Africa is expected to see North African consumption growing from 4.3M
Oils Price Outlook Conference & Exhibition population growth of 500M people. Taken together tonnes to 5.1M tonnes and East Africa rising from
(POC2018), held in Malaysia in March. The with projected economic growth on the continent, 2.4M tonnes to 3.5M tonnes (see Figure 2, p16).
continent’s development possibilities are outlined this should drive vegetable oil consumption up Central and southern African consumption is
in the Rabobank report ‘Rising African Vegetable Oil significantly. West Africa is looking to overtake the projected to see more modest growth, estimated at
Imports in the Next Decade’, presented by Martielli North as the largest African vegetable oil consumer, around 1.9M and 1.2M tonnes by 2030, respectively.
at POC2018. with East Africa also on a strong rise. This being the case, imports should grow fast
As it stands, Africa plays a relatively minor role in Such development will further widen the already over the coming decade. Africa is already one of
global vegetable oil consumption and production, large gap between consumption and domestic the largest single importers of vegetable oils in the
according to Martielli. “Per capita consumption production. In 2016, West Africa produced around world. For example, in 2016/17, it took in 13% of
of vegetable oils in Sub-Saharan Africa is low 3.3M tonnes of vegetable oils, while production global palm oil imports, behind the EU (15%) and
compared to major global consumers. North and in all other areas was below 1M tonnes. African India (21%). Now, Rabobank projects vegetable oil
southern Africa have similar consumption to other vegetable oil production is therefore centred in imports to Africa to grow by an additional 3.5M X

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FIGURE 1: VEGETABLE OIL CONSUMPTION AND PRODUCTION IN AFRICA, 2010-2030 Algeria, which imported approximately 990,000
tonnes of oils in 2016, and Morocco at 510,000
tonnes. The most significant importing ports
include Cairo in Egypt, Tripoli in Libya, Tunis in
Tunisia, Algiers in Algeria and Rabat in Morocco
(see Figure 3, left).
Going forward, Martielli says North Africa will
see some “interesting dynamics developing”. The
region will remain a net importer due to its dry
climate being unfavourable for the development of
significant local oilseed production.North Africa’s
high 24kg/person vegetable oil consumption rate
equals that of China and other emerging economies
and Rabobank says the region could soon reach
levels rivalling those of North America and Europe.
While North Africa is likely to remain the
largest vegetable oil importer within Africa, its
growth rate will be slower than that of most other
regions. Nonetheless, the growth in oil imports will
also drive the North African crushing sector, says
Martielli. Most future growth is expected to come
from population growth, which is expected to
increase by 44M or 24% by 2030.
SOURCE: UNITED NATIONS, USDA RABOBANK

FIGURE 2: VEGETABLE OIL CONSUMPTION AND PRODUCTION IN AFRICA, 2010-2030

Palm rules the east
“East Africa, I think, is the most interesting region
with trade opportunities for palm oil,” Martielli
said at the POC2018. Despite the region’s lowest
per capita consumption of vegetable oil in Africa,
it houses the continent’s largest population and is
also expected to see the highest population growth
by 2030 at 204M people, marking a 47% increase
from current numbers. Additionally, East Africa has
no large-scale edible oil production, meaning the
large increase in consumption must be supplied
through imports.
SOURCE: RABOBANK

FIGURE 3: NORTH AFRICAN VEGETABLE OIL DISTRIBUTION LOGISTICS, 2016 Palm oil is the largest oil import. It made up
85% of the total of 2.6M tonnes imported in 2016,
with soyabean oil holding second place at 8% and
sunflower oil third with 6%. According to Rabobank,
palm oil’s domination will continue into the future
due to East Africa’s proximity to the Indian Ocean.
The main receiving ports include Djibouti City,
Mombasa in Kenya, Dar es Salaam in Tanzania and
Beira in Mozambique (see Figure 4, p17).
Palm oil’s dominating position and East Africa’s
favourable geographical position relative to
Southeast Asia contribute to palm oil’s competitive
price advantage. Currently, Southeast Asia is the
largest supplier of palm oil to Africa.
Kenya is the most significant importer in East
Africa, with total oil imports surpassing 600,000
tonnes in 2016, according to Rabobank. Ethiopia
is showing strong growth, but is still clearly lagging
behind Kenya at nearly 500,000 tonnes of oil
imports. With Tanzania (400,000 tonnes in 2016),
this is the trio that Rabobank says will continue to
X tonnes by 2030, marking a 33% increase over The diversified oil imports are reflected in the take the lion’s share of future vegetable oil imports,
the current levels. However, how this growth will countries of origin. Out of the three key trading fuelled by their high population growth. Another
materialise and in which oils depends on the region. partners of African oil importers – the Black Sea economy of note in East Africa is Uganda, which is
region (BSR), Southeast Asia and South America approaching 300,000 tonnes of imported oil.
The diversified north – North Africa is closest to the BSR, a strategic
position for the area’s growing sunflower oil Imports and exports in the west
North Africa, says Martielli, is the largest vegetable exports. Additionally, being situated by the Suez
oil importing region on the continent with highly Canal opens up trade with Southeast Asian palm oil Like East Africa, the west coast of the continent is
diversified imports. Soyabean oil is the dominating producers. set to witness significant growth in both population
import, responsible for 53% of the region’s total Egypt is by far the largest oil importer in North and vegetable oil imports. With a population growth
imports of 4.1M tonnes in 2016 (see Figure 3, Africa. The country imported roughly 2M tonnes of of 47% – or 166M individuals – by 2030, West Africa
above). Soyabean is followed by palm oil at 25% and vegetable oils in 2016. Palm oil was the top import is likely to require an additional 1.4M tonnes of
sunflower oil at 14%, with the remaining 8% filled by at around 800,000 tonnes, followed closely by the vegetable oils. The region is likely to overtake North
various minor imports. regional favourite, soyabean oil. Behind Egypt are Africa in vegetable oil consumption within the next

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five years, projects Rabobank. In the medium term, Rabobank expects Africa of staple commodities, like vegetable oils, wheat
Another similarity with East Africa is the import to remain a strong net importer. The dependency and rice. If this changes, it can have implications
profile of oils. Palm oil stands as the sovereign ruler on imports can only be alleviated through the on trade flows, potentially accelerating local palm
even more so than in the east, contributing to a discovery of viable development paths to boost local production and driving more investment into
massive 97% of the total 2016 vegetable oil imports – mostly West African – palm oil production. This African refining capacity,” concludes Rabobank. z
of 2.3M tonnes (see Figure 5, below). would require developing special oil palm varieties This article is based on the report, ‘Rising African
Nigeria is the largest importer in the region, that can withstand the typical African climate. Vegetable Oil Imports in the Next Decade’, presented
with palm oil imports at around 1.15M tonnes in “At the moment, foreign-exchange reserves are at POC2018 by Vito Martielli, director of grains and
2016. This marked a decrease from the nearly 1.6M sufficient and do not pose major threats to import oilseeds at Rabobank
tonnes reached in 2014. Behind Nigeria is Benin
with approximately 500,000 tonnes of palm oil in

SOURCE: RABOBANK
FIGURE 4: EAST AFRICAN VEGETABLE OIL DISTRIBUTION LOGISTICS, 2016
2016. The other two major markets in West Africa
– Ghana and Côte d’Ivoire – have significantly lower
imports at roughly 300,000 and 100,000 tonnes in
2016, respectively.
In a quirk in import/export rates, Benin and
Côte d’Ivoire both export large volumes of palm oil,
mostly to other West African countries. In Benin,
imports and exports broke nearly even in 2016, with
exports being only slightly lower at approximately
425,000 tonnes. Côte d’Ivoire exported roughly
300,000 tonnes of palm oil in 2016, three times
more than it imported, making the country the only
net exporter of palm oil in West Africa.

New oil palm strains needed

Altogether, Martielli expects trade of vegetable
oils into Africa to increase significantly in the
coming decade. While per capita consumption
is not expected to grow in meaningful amounts,
the growing population in nearly all parts of
Africa will emerge as the driving factor fuelling
the need for additional vegetable oil supply. Most
of the increased demand is expected to be met
by increased vegetable oil imports due to several
factors resulting in low growth potential in West
African palm oil production.
Multiple emerging markets are likely to step in
to supply the African demand, but price advantage
will, for the most part, favour Southeast Asian palm
oil. An exception to this rule could be North Africa,
where increasing supplies from the Black Sea
region could make sunflower oil more competitive.

SOURCE: RABOBANK, USDA

FIGURE 5: WEST AFRICAN VEGETABLE OIL DISTRIBUTION LOGISTICS AND PALM OIL PRODUCTION VOLUMES, 2016

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