Exploring the Limitless Potential in Benin’s Edible Oil Industry
Edible oils have made a significant place in the food and beverage sector around the world. Benin alone produced 109 thousand tonnes of vegetable oils in 2019 (Source: World Data Atlas).
The African edible oil market was valued at USD 4,803.28 million in 2021. Experts expect it to reach USD 8503.00 million by 2029, registering a CAGR of 7.40% during the forecast period of 2022-29. Also, domestic households are the largest end-user segment owing to the high consumption for household purposes.
Edible oils like palm oil, peanut oil, cotton oil, soya oil, and more refer to a liquid that gets extracted from plants, vegetables, and seeds, respectively. These oils possess fatty acids, anti-oxidants, phospholipids, and more. Being consumed by humans and the food processing industry, edible oil is widely known to contain low fats, calories, and cholesterol.
Some of the major dynamics of the edible oil industry in Benin include:
- An inclination towards a healthy lifestyle
- Prevalence of obesity
- Awareness of good health
- The rise in demand for functional foods
Scope & Insights — Why Invest in the Edible Oil Market
The edible oil market is segmented based on type, package, distribution channel, and end-users. Its growth around all these segments helps Benin to analyze the major growth segments in the industry and provides users with valuable market insights. Thus, it makes it easier for the country to take strategic decisions and identify core market applications.
Some of the popular edible oil products in Benin include:
In the 1950s, Benin launched its first oil palm sector industrialization program in which the colonial government invested in large-scale, public industrial processing facilities. After independence in 1960, the national government established more facilities with greater capacity and planted around 30,000 hectares of selected oil palm seedlings.
The current program for the development of the oil palm sector, based on the distribution of selected oil palm seedlings and infrastructure, benefits only the new private plantation owners. These planters help enjoy a competitive advantage over women small-scale producers on several levels, as they benefit from privileged access to raw materials. From mechanized processing techniques that allow lower cost prices to a larger production of bulk sales that attract more retailers, Benin has become a hub for mass palm oil manufacturing base.
The global market for peanut oil registered a value CAGR of 3.4% from 2016 to 2020. The major factor driving the market growth of peanut oil is increased demand from the food processing industry. Thanks to the rising awareness among consumers of the various health benefits it offers. This demand and need have nudged key peanut oil manufacturers to develop high-quality oil to meet the user’s expectations over time. With a national production of 140135 tons in 2017, Benin’s peanut cultivation helps satisfy the food needs of the entire population and supply the local artisanal processing market with oils and cake products. The consumer segment, hypermarkets, and supermarkets hold the highest market value shares. Thanks to the strong emergence of modern trade channels across various developing regions.
In countries like Benin and Chad, the cottonseed cake obtained by crushing operations constitutes a vital source of proteins for ruminants. From 2016 to 2018, Benin went from 3,377 to 18,747 tons of cottonseed cake produced in semi-industrial production units. This production was destined for intra-African exports in markets like Burkina Faso, Mali, and Niger.
Studies most notably highlight the great potential of developing cotton by-products in cotton-producing countries like Benin. It can improve the livelihoods of farmers, small artisanal, and semi-industrial businesses in vulnerable communities. Investing in cotton oil and its by-products has the potential to create complementary sources of income decoupled from international prices. These fluctuations and value chain disruptions may affect lint production and international export too.
Lack of soil fertility was the prime reason behind low yields and insufficient income for soybean farmers in African countries like Benin. Thanks to the innovation of bio-fertilizers with isotopic techniques, which increased soybean oil production significantly with the support of the Food and Agriculture Organization of the United Nations (FAO). Soybean production has increased from 57,000 tons to 222,000 tons from 2009 to 2021. Also, its value outgrew from US$ 6.6 million to the US $ 109 million (source: IAEA). The Government of Benin (GOB) when exports more, can decrease the nation’s deficit and buy more from the international markets. To increase livelihoods, farmers need to invest efforts to produce more edible oils, crops, and poultry products.
Investing in a Promising, Sustainable Future of Edible Oil Production
Entrepreneurs find Benin to be a stimulating environment with its economic growth developed dramatically in recent years. So, if you are planning to start a business in Benin, now is the perfect time. With the help of an effective government, we can constantly work to make its economy more conducive for foreign business owners and low-to-no taxes structures making it inexpensive for new firms.
Arise IIP offers a wide range of industrial ecosystems that include world-class integrated logistics services for ensured competitiveness. Our industrial hubs dedicatedly contribute to the development of competitive economies and equitable society helping Africa achieve greater income equity.