Officials of the Ministry of Trade & Industry have placed a request for the central bank to make 600 million dollars available for the imports of crude palm oil this year, used as an industrial input by domestic plants.

Expected to be approved by the National Bank of Ethiopia (NBE) in the weeks ahead, the forex permit will be disbursed to four industrial-scale plants: Shemu, Phibela, W. A., and Hamaressa.

Hamaressa, an edible oil processing plant in Harer acquired by East Africa Group from the government, is under the family of Buzuayehu Tadelle, while W. A. is a company largely owned by Worku Aytenew, who has opened an industrial plant near Debre Markos town, Amhara Regional State.

The four plants have a combined production capacity of 91.8 million litres of edible oil a month but struggle to meet half partly due to a shortage of raw materials. The plants require the forex to produce at 60pc of this capacity, which authorities project can meet nearly half of the country's total annual demand of 900 million litres. If allowed, this will be the second batch of forex provision after the Ministry facilitated 47 million dollars for the edible oil factories eight months ago.

Experts from the Ministry conducted a subsequent survey jointly with the Food, Beverage & Pharmaceutical Industry Development Institute and concluded that Ethiopia needs close to a billion dollars to import edible oil the year. Domestic demand for edible oil has grown by two percent, compelling officials of the Ministry to urge the central bank for the provision of 345 million dollars in letters of credit for the Industrial Inputs Development Enterprise and the Ethiopian Trading Businesses Corporation to import processed palm oil.

They hope the supply gap will be covered through franco-valuta import permits, according to Eshete Asfaw, a state minister for Trade.

"Some have already begun importing," Eshete told Fortune.

Despite the colossal figures, the management of the plants would want to receive more than the recommended forex allocations to allow them to sustain production.

Phibela Edible Oil Factory, located in Bure Agro-Industrial Park in Amhara Regional State, will receive a permit for 285 million dollars to import crude palm oil. A subsidiary of Belayneh Kindie Group (BKG), a business conglomerate under a businessman bearing the same name, the plant has a capacity to produce 1.5 million litres a day. However, recurrent power outages, crunch in forex to import crude oil, and political instability to transport agricultural inputs have impeded production, according to Dereje Atnafu, a representative of BKG.

Kalkidan Mengistu, an agronomist, highlights the country's suitability for cultivating oilseeds and attributes the shortage of raw materials to the lack of attention given to the agricultural sector.