MARKET DEVELOPMENT
Uganda: Oil Palm Prices Fall By 50 Per Cent
Uganda: Oil Palm Prices Fall By 50 Per Cent
10/12/2015 (AllAfrica.com) - For the last six months, prices for oil palm on the international market have fallen by about 50 per cent.
This was revealed by Bidco Uganda managing director Kodey Rao during an interview with Daily Monitor in Jinja.
A metric tonne of oil palm, which was at $606 (Shs 2.03m), is now at $391 (Shs1.3m). He was quoting the monthly palm oil currency in Kuala Lumpur, Malaysia, where price for Ugandan oil palm is derived.
Agreement
Currently, a kilogramme of oil palm is at Shs391 in Uganda, which is below the previous price of Shs520.
According to Rao, the local prices are determined by the international oil palm prices as stipulated in a tripartite agreement between the people of Kalangala, the government and Bidco at the inception of the project in 2006.
"We are very much aware of whatever is going on but the prices of oil palm aren't set by the Ugandan standards," Rao explained.
"We usually look at the closing price of oil palm in Malaysia, the cost of transportation from Kalangala to Jinja where the factory is and the importation parity price of oil palm from Malaysia."
Recently, oil palm farmers in Kalangala District expressed concern over the low prices of oil Palm. Led by Martin Lugambwa, the chairperson on Kalangala Oil Palm Growers Association, they claimed that the prices have not gone higher than Shs450 per kilogramme since the plantations started yielding palm oil fruits.
Best prices?
Julius Mukasa Opondo, farmer's representative on the oil palm pricing committee, told them that the prices are determined by a formula, which is not clear since the farmers cannot calculate the price on their own.
"No one has come to teach us how to calculate the price of oil palm. Even we, who represent you (farmers), have only sat once and we had no outcome from the meeting," he said.
However, the Bidco managing director indicated that the prices of oil palm in Uganda are the highest in Africa.
"We have come a long way and Uganda still enjoys the best oil palm prices."
Kalangala has a total of 1770 palm oil farmers, 700 of whom are already yielding palm oil fruits.
According to Kyofa Kabuye, the palm oil coordinator, Vegetable Oil Development project under ministry of Agriculture, the price of a metric tonne on the international market where Uganda's price is derived, was highest in February 2011 at $1248.55 (Shs4.2m at current rates). It was at $483.49 (Shs1.6m) by September this year.
This was revealed by Bidco Uganda managing director Kodey Rao during an interview with Daily Monitor in Jinja.
A metric tonne of oil palm, which was at $606 (Shs 2.03m), is now at $391 (Shs1.3m). He was quoting the monthly palm oil currency in Kuala Lumpur, Malaysia, where price for Ugandan oil palm is derived.
Agreement
Currently, a kilogramme of oil palm is at Shs391 in Uganda, which is below the previous price of Shs520.
According to Rao, the local prices are determined by the international oil palm prices as stipulated in a tripartite agreement between the people of Kalangala, the government and Bidco at the inception of the project in 2006.
"We are very much aware of whatever is going on but the prices of oil palm aren't set by the Ugandan standards," Rao explained.
"We usually look at the closing price of oil palm in Malaysia, the cost of transportation from Kalangala to Jinja where the factory is and the importation parity price of oil palm from Malaysia."
Recently, oil palm farmers in Kalangala District expressed concern over the low prices of oil Palm. Led by Martin Lugambwa, the chairperson on Kalangala Oil Palm Growers Association, they claimed that the prices have not gone higher than Shs450 per kilogramme since the plantations started yielding palm oil fruits.
Best prices?
Julius Mukasa Opondo, farmer's representative on the oil palm pricing committee, told them that the prices are determined by a formula, which is not clear since the farmers cannot calculate the price on their own.
"No one has come to teach us how to calculate the price of oil palm. Even we, who represent you (farmers), have only sat once and we had no outcome from the meeting," he said.
However, the Bidco managing director indicated that the prices of oil palm in Uganda are the highest in Africa.
"We have come a long way and Uganda still enjoys the best oil palm prices."
Kalangala has a total of 1770 palm oil farmers, 700 of whom are already yielding palm oil fruits.
According to Kyofa Kabuye, the palm oil coordinator, Vegetable Oil Development project under ministry of Agriculture, the price of a metric tonne on the international market where Uganda's price is derived, was highest in February 2011 at $1248.55 (Shs4.2m at current rates). It was at $483.49 (Shs1.6m) by September this year.