Local investments in edible oil production needed to reduce import reliance

Yangon Chief Minister U Phyo Min Thein has urged edible oil merchants and businessmen to invest in the local cooking oil sector.

As domestic production is not sufficient for consumption, Myanmar is forced to import cooking oil. As such, U Phyo Min Thein said boosting domestic production of edible oil is needed to reduce reliance on imports, which are more expensive.

“Our local businessmen need to get more involved in the cooking oil business, from growing the crops which produce the oil to marketing our home-produced cooking oil brands,” U Phyo Min Thein said at the 25th anniversary of the Myanmar Edible Oil Dealers’ Association (MEODA).

Currently, Myanmar is still importing a range of cooking oils from vegetable oil to high-quality palm oil. To strengthen the domestic sector though, “businessmen need to invest along the entire supply chain. A systematic strategy should be drafted,” he said.

Currently, domestic consumption of cooking oil is around 1 million tonnes per year. Around 60 percent is used for residential cooking while the remaining is used in commercial food production.

However, domestic production of cooking oil currently amounts to just 400,000 tonnes per year.

“Even if we process all the oil crops produced in Myanmar, the maximum oil production will be 600,000 tonnes. We will still need to import the remaining 400,000 to 600,000 tonnes of cooking oil we need,” said U Myint Kyu, chair of MEODA.

One of the barriers to producing edible oil domestically is cost. As the prices of raw inputs like peanuts, sesame and sunflower are high, local cooking oil prices are high too.

“Low crop production leads to high cost and high cooking oil prices. If the production was double, local oil prices would fall and import could be controlled to some extent,” U Myint Kyu said.

Crop yield is also a problem in Myanmar. In 2013, global production of sesame oil was 4.8 million tonnes, out of which Myanmar contributed some 890,000 tonnes. In comparison, China produced just 560,000 tonnes of sesame oil. Yet, when both countries’ yields were compared, China produced 1.36 tonnes per hectare, which is double Myanmar’s yield of 0.56 tonne per hectare.

Oil crop acreage in the country is now about 7.5 million acres, constituting about16.5pc of the total land available for agriculture.

Local prices for edible oil on November 20 were K 4200 per viss for peanut oil, K 3800 per viss for sesame oil and K 1730 per viss for palm oil according to the statement from the Bayintnaung Wholesale Market.

Retail prices are higher at K 4500 to K5000 per viss for peanut oil and K 4000 to 4500 per viss for sesame oil.

Efforts are now being made between MEODA and the government to encourage local businessmen to participate in expanding and improving the domestic edible oil sector and raise production of homemade cooking oil.

“We are consulting with MEODA for businessmen to invest in agriculture sector.” U Myint Kyu said.

Source : Myanmar Times

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