CASE STUDY

TANZANIA

Investing Back into the Value Chain

Sunflower in Tanzania is a fast-growing industry that contributes significantly to the national edible cooking oil requirements. However, as is the case in many developing countries around the world, edible oil consumption is dominated by palm oil, the cheaper vegetable oil. By value, palm oil imports into Tanzania are the single biggest agricultural product import and the second-largest overall product import behind petroleum oils.

The reliance of the domestic edible oils sector on imported palm oil is thus clear and results in massive forex outflows for the country that could largely be reduced by replacing imported refined palm oil with domestic sunflower oil.

In Tanzania, the traditional pattern of sunflower oil consumption in its crude form is rapidly switching to the consumption of refined sunflower oil. This shift is driven by rising average incomes and the increased affordability of refined sunflower oil in the market. Efficiency inhibiting processing in the value chain needed to be unlocked to ensure competitive supply of local sunflower oil to the market.

Detailed analysis and intervention at specific points in the value chain by Value Chain Solutions, in collaboration with local partners, were instrumental in guiding focused investment by processors and the public sector to unlock efficiency.