Posted on June, 13, 2023 at 06:34 am
Dar es Salaam. The government has encouraged sunflower farmers and processors to export cooking oil to increase the country’s foreign exchange reserves.
Investment, Trade and Industry deputy minister Exaud Kigahe yesterday said the government encouraged the export of various products despite their domestic deficit in order to increase the generation of foreign exchange in the country.
He was speaking on the achievement of the Tanzanian embassy to Cuba, which has secured a market for 270,000 litres of sunflower and soya oil from Tanzania every month.
In a public notice dated June 2, 2023, the country’s ambassador to Cuba, Mr Humphrey Polepole, says the market has been secured in Caribbean and Central American countries.
He says he has convened a meeting with the relevant authorities, including the Agriculture ministry, Investment, Industry and Trade ministry as well as the Tanzania Private Sector Foundation (TPSF).
“The meeting aims to establish our capacity to meet demand for cooking oil in these markets,” reads part of the public notice.
Mr Polepole has called on stakeholders in the sunflower and soya cooking oil value chain to abide by the required quality specifications in order to benefit from the new opportunity.
Yesterday, Mr Kigahe commended Tanzanian embassies for taking economic diplomacy to new heights, noting that the country was, however, facing a cooking oil deficit of over 350,000 tonnes.
“The country’s demand stands at over 570,000 tonnes per year, which is higher compared to a production of 250,000 tonnes. However, the existing deficit doesn’t prevent dealers from exporting the products to secured markets,” he told The Citizen by telephone.
“Exports are allowed for products such as cooking despite the domestic deficit because from the exports the country collects much needed foreign exchange.”
For instance, Mr Kigahe said, the government has allowed importation of crude palm oil for domestic double refining and re-export, therefore enabling the country to generate foreign exchange.
Mr Kigahe, who doubles as the Mufindi North Constituency MP, said the said special arrangement has been put in place to increase the inflow of foreign exchange, therefore encouraging cooking oil stakeholders to meet secured foreign market obligations.
He said in order to bridge the deficit, the government’s interventions have started bearing fruits following the notable increase of sunflower seeds harvests this season, something that will significantly address the shortage of raw materials that domestic processing factories are facing.
"Despite the large number of cooking oil processing factories, insufficient supply of raw materials has forced the firms to operate in two to three months a year,” Mr Kigahe said.
According to him, under-operation has led to an existing deficit leading to reliance on edible oil importation.
The Bank of Tanzania (BoT) Monthly Economic Review (MER) for May, 2023 shows that the value of edible oil import increased to $161.6 million in April 2023, from $153.6 million in the same period of 2022.
Tabling the 2023/24 budget in Parliament, Investment, Industry and Trade minister Ashatu Kijaji said Tanzania had 771 cooking oil processing factories.
They include 21 medium and large scale firms and 750 small scale factories.
“Small scale factories have been utilizing 20 percent of installed capacities only, while medium and large scale firms use between 25 and 40 percent of commissioned capacity,” she told the Budget House.
Dr Kijaji who doubles as Kondoa Constituency legislator added, “The factories’ low production is attributed to insufficient raw materials (seeds) for processing cooking oil enabling them to process for four months of a year.”
However, Agriculture ministry’s Permanent Secretary (PS), Mr Gerald Mweli said the government has come up with strategies aimed at increasing seeds production in order to increase edible oil manufacture.
“They include increasing irrigation infrastructures and provision of subsidized modern seeds to farmers. Hopefully, secured markets will be well serviced in the next two to three years,” he said.
He said already 1,000 tonnes of seeds have been distributed to farmers, noting that the target was to provide 5,000 tonnes in the 2023/24 agriculture season.
The ministry of Agriculture 2023/24 budget shows that distribution of 5,000 tonnes will increase production of sunflower seeds to 1,000,000 tonnes that will enable the production of 300,000 tonnes of cooking oil.
Sunflower seeds production trend
Furthermore, the ministry’s budget shows that production of sunflower seeds has been on the decline in the last five years from 20217/18 to 2021/22.
Source: The Citizen