As request of the Royal Netherlands Embassy in Ethiopia, CDI contributed to the development of the soy sector in the country to decrease its dependence on imported palm oil and support the development of the domestic edible oil sector.
Decrease dependency of imported palm oil
Soybean is a multipurpose crop, which can be used for preparing different kinds of soybean foods, animal feed, soy milk; it is also raw material for the processing industry, and it counter effects depletion of plant nutrients in the soil due to continuous mono-cropping of cereals.
Reasons for promoting the development of soybean sub-sector in Ethiopia:
- Substitution import: currently, 80% of the edible oil consumption is imported as palm oil and soybean oil. Increased domestic edible oil production can substitute these imports and improve the trade balance.
- Satisfy growing domestic demand: Ethiopia with almost 80 million inhabitants is a large market for edible oil.
- Increase capacity utilization in processing industry: currently, the average capacity utilization is estimated to be less than 40%.
- Contribute to food security and commercialization of small holders.
Soy sector platform development
In 2009, an action research was implemented on whether soybean production as value chain commodity is economically feasible. The answer was reassuring, but production was too small (low yield, small areas) and fragmented to cater commercial demand. Markets were underdeveloped but were emerging faster and stronger. As result, CDI was requested to develop 4 chains in the sector in one year time. However, due to lack of trust, developing chains so fast was not a feasible option. Therefore CDI has decided that setting up a 'Soy Platform' where key stakeholders can meet, discuss and solve bottlenecks in the sector and do business was a more realistic approach. As result of the work in the soy platform, several chains have been developed:
- edible oil chain;
- animal feed;
- nutritious food;
- soy milk and other soy products.
For more information on the challenges and recommendations on how to deal with the emerging challenges in the different chains and on platform level, we recommend you to read our policy brief.