The Challenge of Substituting Sunflower Oil for Imported Palm Oil: Evidence from Tanzania

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June 8, 2018 - Author: , , , and Titus Awokuse

Michael Olabisi, David L. Tschirley, David Nyange, and Titus Awokuse, 2018. The Challenge of Substituting Sunflower Oil for Imported Palm Oil: Evidence from Tanzania. Feed the Future Innovation Lab for Food Security Policy Research Paper 99. East Lansing: Michigan State University.

ABSTRACT
Edible oil imports to Africa grew over 10% per year from 2006 to 2015, and accounted for 34% of the continent’s total growth in food imports over this period—the highest share of any food group. In the same period, several African countries experienced a boom in the local production and processing of oil-seeds. The combination of import growth and domestic production booms reveals a gap in the literature on the characteristics of edible oil demand in Africa. We begin to fill this gap by estimating own-price, cross-price, and expenditure elasticities of demand for palm, sunflower, and other edible oils in Tanzania. We apply a QUAIDS model to detailed household level data-focusing on palm and sunflower oil, because for the most part, palm oil is imported and sunflower is domestically produced. Our main finding is a surprisingly low level of substitution between the domestic and imported edible oils. Simulated budget shares from our estimates suggest that a 10% tariff increase on palm oil leads to less than a 0.06% change in the budget share of domestically produced sunflower oil. We identify other potential policy implications from our findings and highlight steps for further research.

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Tags: agrifood system transformation, cross-cutting, edible oils, fsg research paper, fsp research paper, nutrition, palm oil, sunflower oil, tanzania


Related Topic Areas

Tanzania, C4b, FSP Nutrition Dataset


Authors

Michael Olabisi

Michael Olabisi
517-432-6656
olabisim@msu.edu

David L. Tschirley

David L. Tschirley
517-355-0134
tschirle@msu.edu

David Nyange

David Nyange
+255-754-272-573
nyange@msu.edu

Titus O. Awokuse

Titus O. Awokuse
517-355-4567
awokuset@msu.edu


For more information visit:

Food Security Group
Feed the Future Innovation Lab for Food Security Policy

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