Coconut, palm kernel or babassu oil and fractions market in Africa

Earlier Report Observations

In 2018, a 23% rise in palm oil prices in Kenya signaled growing demand and spurred farmer interest in production, contributing to an increase in domestic output from 446.5 thousand tons to 466.2 thousand tons in 2019. However, total market volume fell from 572.8 thousand tons to 538.0 thousand tons in 2019, largely due to a sharp drop in imports from 165.9 thousand tons to 103.8 thousand tons. The situation was exacerbated in 2020 when Indonesia, a key supplier, imposed an export ban on palm oil, leading to shortages and a further reduction in Kenyan imports to 101.4 thousand tons. The market volume stabilized at 536.4 thousand tons, while production edged down slightly to 465.5 thousand tons.

From 2021, the focus shifted to boosting local production. The Kenya Agricultural and Livestock Research Organization (KALRO) initiated research on oil palm cultivation in Western Kenya, providing a stimulus that helped raise output to 496.0 thousand tons. Market volume recovered to 567.4 thousand tons. In 2022, production continued to grow, reaching 515.7 thousand tons, while the market remained stable at 568.5 thousand tons as a decline in imports was offset by increased domestic supply. In 2023, the government announced plans to cut edible oil imports by KES 120 billion, promoting local cultivation of oil seeds including palm oil. This was accompanied by production rising to 523.8 thousand tons and market volume expanding to 609.0 thousand tons.

In 2024, the market faced new regulatory and operational challenges. A 10% import duty on crude palm oil was introduced under the East African Community common external tariff, raising concerns about cooking oil price hikes. Simultaneously, major processors like Pwani Oil halted production due to raw material shortages and foreign currency constraints, worsened by export suspensions from Indonesia. These factors strained the supply chain and highlighted Kenya's ongoing reliance on imports from Indonesia and Malaysia.

Production coconut, palm kernel or babassu oil and fractions in Africa

In kind, 2017-2020, K t

Top producers of coconut, palm kernel or babassu oil and fractions, 2017-2020

World map of production of coconut, palm kernel or babassu oil and fractions, 2017-2020

Africa's production of coconut, palm kernel, or babassu oil and fractions saw a decline after two years of growth. In 2019, production reached its peak at 466.2 thousand tons, but in 2020, it remained nearly unchanged at 465.5 thousand tons. Over the period from 2017 to 2020, production increased by 7.4%, with an average annual growth rate of 2.4%. The largest year-on-year increase occurred in 2019, at 4.4%.

Annual dynamics of production in Africa in kind, 2017-2020, K t

In value, 2017-2020, M $ US

Following a two-year decline, Africa's production value of coconut, palm kernel, or babassu oil and fractions rebounded. In 2019, the value hit a low of 434.0 million US dollars, but in 2020, it rose to 463.5 million US dollars, marking a modest gain of 6.8% compared to the previous year. From 2017 to 2020, overall production value decreased by 18.5%, with an average annual decline of 6.6%. The sharpest drop was recorded in 2018, at 19.8%.

Annual dynamics of production in Africa in value, 2017-2020, M $ US

Exports coconut, palm kernel or babassu oil and fractions from Africa

Exports in kind, K t

Exports of coconut, palm kernel, or babassu oil and fractions from Africa fell for the second year in a row. In 2019, exports decreased by 19.3%, and in 2020, they stood at 30.5 thousand tons, down 4.8% from 2019. Between 2017 and 2020, exports dropped by 8.2%, equating to an average annual decrease of 2.8%. The highest export volume was in 2018 at 39.7 thousand tons, which also saw the largest increase of 19.6%.

Annual dynamics of product's exports from Africa in kind, 2017-2020, K t

From 2017 to 2020, Africa's exports of coconut, palm kernel, or babassu oil and fractions were distributed across numerous markets. Even the top destinations—the Netherlands, Italy, and Spain—collectively accounted for only 46.4% of total exports in volume terms, highlighting a diverse export landscape.

Structure of product's exports in kind by countries, 2017-2020

World map of product's exports from Africa in kind, 2017-2020

Exports in value, M $ US

After two years of decline, the value of coconut, palm kernel, or babassu oil and fractions exports from Africa increased. In 2019, export value reached a low of 29.8 million US dollars, but in 2020, it rose to 30.3 million US dollars, a gain of 1.8% year-over-year. Over the 2017-2020 period, export value fell by 30.3%, with an average annual decline of 11.3%. The largest decrease occurred in 2019, at 26.5%.

Annual dynamics of product's exports from Africa in value, 2017-2020, M $ US

During 2017–2020, the Netherlands, Italy, and Spain were key buyers of coconut, palm kernel, or babassu oil and fractions from Africa, accounting for 26.0%, 10.4%, and 9.6% of export value, respectively. However, their combined share totaled only 46.0% of total exports in value terms, with the remaining 54.0% spread across many other trading partners.

Structure of product's exports in value by countries, 2017-2020

World map of product's exports from Africa in value, 2017-2020

Imports coconut, palm kernel or babassu oil and fractions to Africa

Imports in kind, K t

Africa's imports of coconut, palm kernel, or babassu oil and fractions declined for the second consecutive year. In 2019, imports dropped sharply by 37.5%, and in 2020, they stood at 101.4 thousand tons, a slight decrease of 2.3% compared to 2019. Between 2017 and 2020, imports fell by 24%, with an average annual decline of 8.8%. The peak import volume was in 2018 at 165.9 thousand tons, which also saw the largest increase of 24.3%.

Annual dynamics of product's imports to Africa in kind, 2017-2020, K t

From 2017 to 2020, Indonesia and Malaysia dominated Africa's imports of coconut, palm kernel, or babassu oil and fractions in volume terms, together accounting for 88.2% of total flows. Other destinations contributed smaller individual shares.

Structure of product's imports in kind by countries, 2017-2020

World map of product's imports to Africa in kind, 2017-2020

Imports in value, M $ US

Following a two-year decline, the value of coconut, palm kernel, or babassu oil and fractions imports into Africa increased. In 2019, import value hit a low of 90.3 million US dollars, but in 2020, it rose to 97.6 million US dollars, a modest gain of 8.1% from the previous year. Over the 2017-2020 period, import value decreased by 50.5%, with an average annual decline of 20.9%. The largest drop was recorded in 2019, at 50.8%.

Annual dynamics of product's imports to Africa in value, 2017-2020, M $ US

Throughout 2017–2020, Indonesia and Malaysia concentrated 88.4% of Africa's total import value for coconut, palm kernel, or babassu oil and fractions. The remaining share was distributed among other destinations, each with smaller contributions.

Structure of product's imports in value by countries, 2017-2020

World map of product's imports to Africa in value, 2017-2020