Local Manufacturers of edible oil are proposing a raft of measures to lower the cost of cooking oil and protect the industry from imports creating uneven competition.
An estimated Sh100 billion in capital has been invested in the sector that has a combined installed processing capacity of 7,160 metric tonnes per day. The current market demand and consumption is about 800,000 metric tonne underscoring the sectors commitment to a robust manufacturing agenda and local economic growth.
In recent past the cost of cooking oil has skyrocketed leaving many consumers with limited option on the commodity. In a statement, players in the industry through umbrella body, The Kenya Association of Manufacturers defended the price adjustment saying it is a consequence of global price trends.
“Local selling prices of edible oil products follow global price trends which are always influx owing to international market forces,” said manufacturers. “As prices come down from their excessive high levels, the prices to end consumers will continue falling.”
Last year, the industry paid Kenya Revenue Authority and the Agriculture Food Authority in excess of Sh40 billion inform of PAYE and other income taxes. Others include the Railway Development levy, Import Declaration Fees, National Oil Crop Development Levy and Value Added Tax.
“Given the important role the edible oil manufacturing sector plays in the economy our objective is to find a lasting solution in lowering the cost of cooking oil,” reads a statement signed by the Edible Oils Sub-Sector- Kenya Association of Manufacturers.
“We need to ensure sustainable growth of local manufacturing to protect jobs and support economic growth through value addition.”
The sector wants 2 per cent it contributes to the National Oil Crop Development Levy to be used to develop Palm, Soya and Sunflower farming.
MEASURES TO GROW EDIBLE OIL
As a measure to develop the industry, the players want the government to allocate suitable land for palm growing noting that with the incentive, the private sector will be able to harness investment through public private sector partnerships with priority given to job creation and infrastructure development.
“We thank the government for continuing the stay of application of the tariff on ready-made refined imported oils from outside EAC and COMESA at 25 per cent in the EAC CET. The ideal would have been to retain this at 35 per cent as this is under the category of finished goods.”
Recently, the High Court suspended a decision by the government to import 125,000 metric tonnes of edible oils. The government had approved the decision in November last year as part of measures to stabilize prices after drought that resulted into a shortage of household supplies and higher food prices.
The government’s action was to facilitate the importation of duty-free products, including edible oil for a period of one year from January this year.
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