Planning and Economic Development Minister Matia Kasaija

Uganda’s Finance Ministry has announced plans to allocate additional land to Kenya’s Bidco Africa to boost its palm oil production amid rising prices of cooking oil.

Prices of cooking oil in the East African country have risen 21% between December last year and February 2022 and 77.6% within the past year.

According to Finance, Planning and Economic Development Minister Matia Kasaija, the global shortage of palm oil, sunflower and soybeans have provided an opportunity for Uganda to increase production of the commodities.

This is expected to replace imports whose supply continue to be constrained by the Russia-Ukraine war.

“We have partnered with Bidco to grow palm oil in Kalangala and will provide more land to Bidco in Bukura Limited in Sango Bay to grow more palm oil,” said Kasaija.

Bidco Africa, Wilmar Group of Malaysia and Josovina Commodities of Singapore through Oil Palm Uganda Limited, a joint venture, have invested $150 million for Uganda’s Vegetable Oil development Project in Kalangala.

The project intends to cut imports from Russia, Ukraine, Malaysia and Indonesia who are major exporters of seed oil.

The Kenyan-based multinational is currently working with 30,000 farmers within East Africa who supply it with soya beans and sunflower for the manufacturing of fats and edible oil products.

Rising prices of cooking oil have been attributed to the COVID-19 pandemic which disrupted production and resulted in an aggregate demand upon relaxation of the rules.

Uganda currently imports 70% of crude palm oil as an input for the production of cooking oil and soap with prices of the latter rising 20% between December and February this year and 47.8% within the past year.

Indonesia and Malaysia which produce close to 90% of the world’s crude palm oil have recently seen a spike in demand on account of increased demand from China and India, two of the largest buyers of palm oil in the world, a factor Kasaija also attributes to the rising prices of the commodity.

“Furthermore, the ongoing geopolitical tensions between Russia and Ukraine – the two nations that account for half of the global supply of palm oil, substitutes have exacerbated the global shortages resulting in higher prices of raw materials,” he added.

Kasaija has however warned unscrupulous traders against taking advantage of the situation by hoarding essential commodities in order to create artificial shortages and hike prices.

“We are working with the relevant agencies to investigate this matter and we will take action against any operators found to be engaged in this practice,” he warned.

He however affirmed that the situation will abate sooner hence consumers should not panic.