Africa News Bulletin
  • Home
  • Country
  • Business and Economy
  • Politics and Security
  • Tech & Science
  • Health
  • Sports
  • Lifestyle & Arts
  • World
  • Contact Us
No Result
View All Result
  • Home
  • Country
  • Business and Economy
  • Politics and Security
  • Tech & Science
  • Health
  • Sports
  • Lifestyle & Arts
  • World
  • Contact Us
No Result
View All Result
Africa News Bulletin
No Result
View All Result
Home Business and Economy

Malawi: Revitalise Oil Industry To Promote Industrialisation

June 23, 2022
in Business and Economy, Todays Headlines
Cooking-oil Africa News Bulletin

It is said that there is an opportunity in adversity. The unfortunate war between Russia and Ukraine can provide an opportunity for local oil farmers and manufacturers to capitalise on the shortage of vegetable oil in the international market.

You might also like

Kenya: Observers laud Kenya for increased number of women in polls

Tanzania: Samia eyes opening Iringa’s economy to the world

How Burna Boy set the world alight with his mixed brew of influences

The Russia-Ukraine war worsened a vegetable oil shortage

Before the war, Russia and Ukraine provided about 75 percent of sunflower seed oil, a primary source of cooking oil in many parts of the developing world, including Malawi, to the international market.

Russia’s invasion of Ukraine destroyed that country’s agriculture, preventing harvests and destroying granaries. The war has also made it difficult to move products from Russia to Ukraine into Europe and the wider world. As a result, the supply in the international market has gone down.

The war has compounded a shortage of vegetable oils such as rapeseed oil, soya bean and palm oils caused by droughts in key-producing countries in South America and Canada as well as Typhoon Rai in Malaysia last December, according to the International Food Policy Research Institute (Ifpri).

Considering that vegetable oils are similar and can usually be used interchangeably, the disruptions caused by the Russia-Ukraine war has caused global oil prices to rise across the board as it always happens with substitute products.

Tridge, an international business network that focuses on using data intelligence to promote cross-border trade, said the price of sunflower and its derivatives skyrocketed after Russia invaded Ukraine and is more than 70 percent higher year-on-year.

On its part, Mercy Corps said the price of vegetable oils rose by seven percent between February and June 2022.

Kwacha devaluation may erode competitive advantage

In an earlier interview, local development researcher and analyst Misonzi Gundo also said the 25 percent depreciation of the kwacha could potentially erase the advantage local manufacturers attained by switching from processing oil locally to buying crude oil for refinement from cheaper markets in Asia and South America.

Before the devaluation, importing crude oil was cheaper than processing locally, but it remains to be seen if it will remain so, considering the shortage of vegetable oils caused by droughts in key producing areas and the Russia-Ukraine war.

Perhaps it is time Malawi turns inward and starts producing locally.

An opportunity abounds, but challenges remain

Agricultural entrepreneur, Victoria Mwafulirwa, acknowledges that the supply disruptions in the global market create an opportunity for Malawians, saying: “This is a crisis. It is not going to go away anytime soon. It is, therefore, an opportunity for people or entrepreneurs like myself.”

Malawi University of Business and Applied Sciences associate professor of economics Betchani Tchereni said the economic conditions in the global market create an opportunity for Malawi to “create jobs, rejuvenate the economy and promote local industrialisation” in line with the Malawi 2063, the country’s long-term development plan.

He said processed oil seeds for the local market can provide a viable alternative to tobacco, the country’s main export, considering the declining demand for the so-called green gold on the international market.

He said: “So, we should make sure that before we export soya beans or sunflower oil or any other vegetable oil in their raw form, we should make sure that we process it into cooking oil. It would even be better if we were supplying the cooking oil rather than the raw materials.”

However, Mwafulirwa, the proprietor of Home Industries, a local manufacturing company that produces sunflower oil, says the local farmers face a myriad of challenges such as competition for raw materials from informal vendors and a lack of financing opportunities.

She also said inefficient agricultural systems used by local farmers—using a hoe for production, dependence on rain-fed agriculture and a general lack of storage facilities—lead to low yields, compounding the shortage of sunflower oil seed, a key raw material.

Said Mwafulirwa: “We are still using rain-fed agriculture for production. Why can’t we use irrigation on our farms to have a sustainable source of raw materials like sunflower seed? For us to have a sustainable source of sunflower, we need to grow it in both the rainy and dry seasons.

“And we have not yet mechanised our agriculture. Farmers still use a hole, which is not economically viable. We might have plenty of land, but if we cultivate it manually, we will not be able to maximise the return from that land.”

However, Tchereni urged policymakers to exercise caution when implementing policies to transition Malawian farmers from subsistence to commercial farming.

“If we are transitioning from subsistence agriculture, we must find an alternative for the subsistence farmers. When bringing in mechanisation, we should remember that it is expensive to mechanise small farms. So, all these factors must be considered,” he says.

What are the possible solutions?

Agricultural researchers and local manufacturers have since urged the government to implement policies and strategies that can help alleviate the challenges.

In its policy brief for March 2020, the Mwapata Institute, a local think-tank, urged donors and the Malawi government to shift from narrowly focusing on maize production “to facilitate farmers’ entrance into these markets could help lessen the impact of forthcoming shocks and provide opportunities for growth.”

Concurring with the institute, Mwafulirwa said the government can incentivise vegetable oil farmers by investing in seed technologies and setting minimum prices to protect farmers from exploitative prices in the local market.

“The contracts that we employ with our smallholder farmers work, but they are not as robust and efficient as other contracts. The government, through the ADDs [Agriculture Development Divisions], to apply the same incentives and enforce the law to protect how much oil seed is going out of the country,” she said.

The entrepreneur stressed that revitalising the vegetable oil industry will require a concerted effort from the government, farmers, manufactures and financing institutions to ensure that there is enough support from the production stage through to processing and value addition.

NATION

Tags: Malawi

Recommended For You

Kenya: Observers laud Kenya for increased number of women in polls

August 13, 2022
Kenya: Observers laud Kenya for increased number of women in polls

More women ran for office, and won, in the just concluded Kenyan General Election compared to the previous ones, a result of efforts by state agencies working together...

Read more

Tanzania: Samia eyes opening Iringa’s economy to the world

August 13, 2022
Tanzania: Samia eyes opening Iringa’s economy to the world

In a deliberate move to open the economy of Iringa Region, President Samia Suluhu Hassan’s administration has outlined expansion plans of 9,750 hectares of irrigated land and construction...

Read more

How Burna Boy set the world alight with his mixed brew of influences

August 13, 2022
How Burna Boy set the world alight with his mixed brew of influences

Nigerian Afrobeats star Burna Boy burst onto the global stage in 2018 with a slew of irresistible hits on his third album, Outside, accompanied by mandatory fiendish good...

Read more

Kenya: William Ruto set to control Senate after bagging 24 seats

August 13, 2022
Kenya: William Ruto set to control Senate after bagging 24 seats

UDA presidential Kenya Kwanza leader William Ruto is set to control the Senate after bagging a majority of the seats across the country in the just concluded election,...

Read more

ESWATINI: NEDBANK GROUP EARNINGS UP BY 27% TO E6.7 BILLION

August 12, 2022
1660206338 Africa News Bulletin

The Nedbank Group has delivered an excellent financial performance for the six months ended June 30, as headline earnings (HE) increased by 27 per cent to E6.7 billion....

Read more

ESWATINI: LIDWALA HEALTH LAUNCHED

August 12, 2022
1660206811 Africa News Bulletin

Lidwala Insurance has launched a medical aid cover that will be affordable to almost every member of the public. The medical aid cover was launched yesterday. Under this...

Read more

ESWATINI: PROM CLOSET TO MAKE PROM NIGHTS BETTER

August 12, 2022
1660207232 Africa News Bulletin

A noble initiative Eswatini Prom Closet has been officially launched. The initiative was launched at Mdzimba View, where the brains behind the concept said the campaign would focus...

Read more

Côte d’Ivoire: Ambassador Maurice Bandama Salutes the Dynamism of the Ivorian Diaspora

August 12, 2022
120460 Africa News Bulletin

Like all Ivorian diplomatic representations around the world, the Embassy of Côte d'Ivoire in France commemorated the 62nd anniversary of the independence of Côte d'Ivoire, on Sunday August...

Read more
Next Post
mozambique.-gas.-electricity. Africa News Bulletin

Mozambique: Renewables And Gas Are The Cheapest Ways To Meet Country’s Electricity Demand

Discussion about this post

Newsletter

Subscribe!

Sign up to our Daily News Briefing and get access to African Stories in Real Time.

  • Home
  • Country
Menu
  • Home
  • Country
  • World
  • Contact Us
Menu
  • World
  • Contact Us
  • Business and Economy
  • Politics and Security
Menu
  • Business and Economy
  • Politics and Security
  • Health
  • Lifestyle & Arts
Menu
  • Health
  • Lifestyle & Arts
  • Tech & Science
  • Sports
Menu
  • Tech & Science
  • Sports
  • Advertise with us
  • Privacy Policy
  • Contact Us
Menu
  • Advertise with us
  • Privacy Policy
  • Contact Us

© 2022 Africa News Bulletin. The Africa News Bulletin is not responsible for the content of external sites. Read about our approach to external linking.

Facebook Twitter Instagram Linkedin Youtube
No Result
View All Result
  • Home
  • Country
  • Business and Economy
  • Politics and Security
  • Tech & Science
  • Health
  • Sports
  • Lifestyle & Arts
  • World
  • Contact Us

© 2022 Africa News Bulletin by Africa News Bulletin Team.