Central Asia and sub-Saharan Africa represent key growth areas for the expansion of palm oil businesses, as both offer unique opportunities for local players and investors, say palm oil experts.
Speaking at the virtual ‘Future Proof Palm Oil’ forum, Hisamuddin Mohamad Aspar, regional manager of product development for Central Asia at the Malaysian Palm Oil Board, said that with most regions relying on imported oil and fats, this was a key opportunity for Malaysian suppliers.
He said that over 2.3 million tonnes of oil and fat was annually imported by Central Asia (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan) and Iran, much of which is sunflower oil, which presents plenty of room for palm oil to grow its market share.
“Palm oil market share in the region is still low at below 7%, and there is room for expansion particularly in the production of solid fats and blended cooking oils,” he said, noting also that the emergence of fast food chains in the region will likely spur the demand of vegetable oils.
As for Africa, Fatima Alimohamed, chairperson of the Agribusiness Sector of the Association of Ghana Industries, said the new African Continental Free Trade Area creates a “borderless” continent, which she believes Malaysian palm oil companies would be wise to capitalise on through trade agreements.
“This image that Africa is poor, that we continue to have a bowl in our hands, that has changed now,” she said, adding that in addition to a rapidly growing economy, the continent has an abundance of resources and a large workforce that companies can capitalise on through the setting up of plantations or refineries.
“I don’t believe discussions have started in terms of preferential agreements that can be done between Asia and respective governments in Africa” she said, “but now there are discussions that should be taking place at the top level to see how we can collaborate and be partners”.
When entering new markets, Marco Tieman, founder and CEO of supply chain experts LBB International said, ensuring halal compliance throughout the process was a must, from harvesting to manufacturing and distribution.
“As halal is moving from a product to a supply chain approach, it is becoming very complex to manage without the right ecosystem in place.”
He said that new international standards that have been established are a “game changer” as it covers the entire supply chain and offers a guide to help palm oil companies maintain halal compliance from crop to consumer.