Madagascar’s edible oil industry urges action against rising imports

MADAGASCAR – The edible oil sectorIn Madagascar, is facing significant challenges as it competes against increasing imports, which have become the second-largest expenditure for food imports after rice.

On July 18, 2024, the Malagasy government notified the World Trade Organization (WTO) Committee on Safeguards about initiating a safeguard investigation into certain categories of edible vegetable oils.

This inquiry aims to assess whether the surge in imports is causing or threatening to cause serious harm to domestic producers.

The call for protective measures follows a petition from the National Vegetable Oil Production Industry (NPB), which requested action from the National Trade Remedies Authority (ANMCC).

The NPB’s concerns are underscored by alarming statistics: in 2023, the market share of edible oil imports rose by 13 index points, while local suppliers saw a decline of 15 index points.

“All producers of refined vegetable oils have ceased their production activity because of the increase in imports. Only the products of the HITA company (Huilerie industrielle de Tamatave) are present on the local market,” the notification to the WTO stated, highlighting the dire situation for local manufacturers.

The ANMCC has indicated that the investigation will take between nine to twelve months, during which they will evaluate the potential for implementing import restrictions.

 “We are talking here about restricting the quantity of imports to limit the quotas of products that can enter Madagascar,” an ANMCC representative told local daily L’Express de Madagascar on July 24.

This move is seen as a necessary step to protect local producers from overwhelming foreign competition.

Argentina, Egypt, and Malaysia are the primary sources of edible oil imports to Madagascar, accounting for over 80% of the $199 million worth of vegetable fats and oils imported in 2023.

The ANMCC plans to scrutinize these countries closely, stating, “They will be questioned about their export quantities and the orders they receive to determine the limits of exports to Madagascar.”

This investigation is crucial for understanding the dynamics of the import market and its impact on local production.

The situation is particularly pressing given Madagascar’s reliance on imported vegetable oils since the collapse of its domestic production capabilities following political turmoil in 2009.

The only remaining local production comes from small artisanal units that struggle with quality and packaging issues.

 The rise in imports has not only affected the economy but also the livelihoods of many involved in the local edible oil industry.

The Malagasy government’s decision to initiate this investigation reflects a broader strategy to bolster domestic production and ensure food security.

The edible oil sector’s plight is emblematic of the challenges faced by many local industries in Madagascar, where foreign competition often undermines local businesses.

As the investigation unfolds, stakeholders in the edible oil industry remain hopeful for protective measures that could restore balance to the market.

The outcome will significantly influence the future of Madagascar’s edible oil sector and its ability to compete with imported products.

The ANMCC’s commitment to addressing these challenges is a critical step towards revitalizing local production and safeguarding the interests of Malagasy consumers and producers alike.

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