Ethiopia edible oil market seen growing as import substitution accelerates

By AI, Created 10:53 AM UTC, May 19, 2026, /AGP/ – Ethiopia’s edible oil market was valued at 838.76 million tons in 2025 and is projected to reach 941.32 million tons by 2034, according to IMARC Group. The forecast comes as the government pushes to cut import dependence, expand local refining and increase domestic oilseed production.

Why it matters: - Ethiopia still meets about 90% of edible oil demand with imports, creating a major supply and foreign-exchange burden. - The government’s import-substitution push could reshape farming, processing and distribution across the country. - New refineries and oilseed investments could reduce reliance on imported palm oil and strengthen local food security.

What happened: - IMARC Group said Ethiopia’s edible oil market reached 838.76 million tons in 2025 and is projected to hit 941.32 million tons by 2034. - The market forecast implies a compound annual growth rate of 1.29% from 2026 to 2034. - The Ministry of Agriculture set a goal to raise domestic edible oil coverage from 13% of national demand to 25%. - The Phibela Industrial Complex in Bure, Amhara Region, was built with 4.5 billion birr in investment and has capacity to produce 1.5 million litres of palm and sunflower oil per day. - Ethiopia opened a $113.7 million mega edible oil processing factory to expand domestic supply. - A separate five billion birr edible oil plant also went operational. - The government lifted a four-year ban on edible oil imports for local companies. - The Ministry of Trade readied more than 13.6 million litres of cooking oil for distribution ahead of major public holidays.

The details: - Ethiopia’s edible oil demand reached 686 million litres in the previous year. - Annual import spending on edible oil is approaching $500 million, with most imports coming from Indonesia and Malaysia. - Local production covers only about 13% of national requirements. - The five largest refineries — Phibela, Hamaressa, Shemu, Al-Impex and Gifti Foods — jointly requested $930 million in working capital support. - Those refiners said they were operating at about 40% of capacity because of foreign-currency shortages and limited raw material access. - Ethiopia grows nine major oilseed crops: sesame, niger seed, soybean, sunflower, groundnut, linseed, rapeseed, castor and cotton seed. - Those crops account for about 20% of agricultural export revenues, second only to coffee. - The Ministry of Agriculture is promoting more sunflower, groundnut and soybean cultivation for local refineries. - Oil palm cultivation in Gambella and southern regions is being explored as a long-term supply option. - A 100-hectare pilot oil palm plantation exists near Tepi, with plans for expansion. - The full report is available as the company’s announcement and the market report.

Between the lines: - Ethiopia is trying to repeat its wheat self-sufficiency playbook in edible oil. - The gap between installed processing capacity and actual output shows the main constraint is not only factory investment, but also crude supply, foreign exchange and logistics. - Consumer demand is shifting toward sunflower and soybean oils as health awareness rises in urban markets. - AI tools are being pitched as a way to improve crop yields, quality control, forecasting and maintenance, but the source material presents these as industry applications rather than confirmed nationwide adoption.

What’s next: - Ethiopia is likely to keep expanding oilseed cultivation, refining capacity and agro-processing parks. - The government’s long-term focus on oil palm suggests a push for deeper self-sufficiency over the next decade. - Refineries will still need better access to crude oil and working capital before new capacity translates into full output. - Holiday-season distribution and import policy will remain important tools for keeping supply stable.

The bottom line: - Ethiopia’s edible oil market is growing slowly, but the bigger story is a state-backed drive to replace imports with local production. Success will depend on whether farms, refineries and financing can scale fast enough to close a large supply gap.