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Research Journal of Agriculture and Environmental Management. Vol. 3(9), pp. 477-484, September, 2014
Available online at http://www.apexjournal.org
ISSN 2315 - 8719© 2014 Apex Journal International
Full Length Research
Trends in Soy Bean Trade in Ethiopia
Mekonnen Hailu* and Kaleb Kelemu
Ethiopian Institute of Agricultural Research.
Accepted 19 August, 2014
Soybean is a multipurpose most nutritionally rich crop as its dry seed contains the highest protein and
oil content among grain legumes with a good balance of the essential amino acids and oil. This study
was conducted to analyze the trend of soy bean trade in Ethiopia. Both primary and secondary sources
of data on production and trade of soybean were used. The study identify The total hectare of land
under soy bean production during the last 10 years has increased by 10 folds; while the total volume of
production during the same period increased by 21 folds. Productivity level of soy bean is 1.06 ton/ha
and this level is very low compared to its potential which could go up to 4 ton/ha if improved varieties
are used. The country imports 15 million Kilograms of soy bean products and spend 11 million USD for
importing various soy bean products every year. The average volume of soy bean export is 1.4 million
Kilograms with trade deficit of 138 million Kilograms annually. The Value-to-Volume ratio for imported
soy bean products has shown increasing trend during the last 12 years. Sudan, Indonesia, Djibouti,
Netherlands and Vietnam are the highest volume recipient countries for Ethiopian soy bean export. The
study recommends the need to link commercially oriented small and large scale farmers to value
chains. This means, industries engaged in processing of oil crops to produce edible oil need to be
supported or encouraged to start processing soy bean. Farmers need to be linked with soy bean
processing factories as a result market is secured for farmers to become interested to engage in soy
bean production. Promote soy production and processing among small holders, engaged in
subsistence farming, for food security purposes.
Key words: Soybean, product, farmer, Ethiopia.
INTRODUCTION
Soybean is a multipurpose crop, which can be used for a
variety of purposes including preparation of different
kinds of soybean foods, animal feed, soy milk, raw
material for the processing industry, and it counter effects
depletion of plant nutrients in the soil resulting from
continuous mono-cropping of cereals, especially maize
and sorghum, thereby contributing to increasing soy
fertility (Hailegiorgis, 2010). There is also a potential to
intercrop soybean with long stem crops such as maize
and sugarcane (Jagwe and Owuor, 2004).
Food insecurity and malnutrition are among the urgent
challenges that developing countries face these days.
The major staple food crop of most developing Sub-
Saharan African Countries, maize, contains low protein
(5.2-13.7 %) (FAO, 2010). The challenges are especially
*Corresponding author. Email: mekonnen69@yahoo.com
acute in Ethiopia and relatively more serious in the rural
than urban areas, mainly because of a low level of
understanding of a balanced diet and lack of capacity to
purchase animal source proteins. Producing and
consuming more soy would improve the situation as soy
provides a nutritious combination of both calorie and
protein intake: it is the most nutritionally rich crop, as its
dry seed contains the highest protein and oil content
among grain legumes (40 to 42% protein) with a good
balance of the essential amino acids and has 18-20% oil
on a dry seed weight basis. It is cheap and rich source of
protein for poor farmers, who have less access to animal
source protein, because of their low purchasing capacity
(Osho, 1995).
Despite the significance of soy bean to address food
and nutrition insecurity problems prevailing in the country,
little emphasis has been given to production, supply and
export of this important commodity. This study therefore
is conducted to examine the status and trends of
478 Res. J. Agric. Environ. Manage
production and import and export trade of soy bean with
a purpose of generating information that help understand
and evaluate the soy bean trade performance of the
country that will enhance informed decision for taking
measure and actions for expansion of soy bean
production and trade in Ethiopia.
METHODOLOGY
Data sources and collecting techniques
Both primary and secondary sources of data on
production and trade of soybean were used. Primary data
sources include soy bean companies engaged in
production and export of soy bean and farmers that
produce soy bean. Data on volume and value of imported
and exported soy bean were collected from revenue and
customs authority and central statistical agency.
Checklist guided Key informant interview was the method
used to collect data from primary sources.
Data analysis
Trend analysis was the method of data analysis used
both for value and volume of traded soy bean. The Value-
to-Volume Ratios which show the trend in status and
trend of Ethiopia position in terms of value gained for
exported and imported soy bean products from
international market. Comparative analysis of source of
imported soy bean products and destination countries for
exported soy bean is made to show the relative
advantage of where to import from and where to sell
Ethiopia’s soy bean products. Descriptive statistical tools
have been used to analyze the major trends in the value
and volume soy bean trade.
RESULTS AND DISCUSSIONS
Soy bean Production, Productivity and area of Land
under Cultivation
The total area of land under the production and total
volume of production of soy bean has been growing over
years. It is found that the major source of increase in the
total production of soy bean has been mainly resulted
from increase in area of land allocated for its production.
The total hectare of land under soy bean production
between 2001/02 and 2011/12 has increased by 10 folds;
while the total volume of soy bean production during the
same period has increased by more than 21 folds. The
increased hectare of land for the production of soy bean
as well as increased total production during the last ten
years has been resulted from increasing demand for soy
bean at local and international market (CSA 2000-2011).
Despite the tremendous increase in the amount of land
allocated for soy bean production during the last ten
years, the amount of land allocated for the production of
soy bean is very low compared to land allocated for other
oil crop commodities (FAO 2010).
Productivity gains are very instrumental for sustainable
agricultural growth in general stipulated in the national
agricultural development strategy of the country.
Productivity level of many other major crops is very low.
The current average national productivity level of soy
bean similar to other crops is also low. The average
productivity level of soy bean during the last ten year was
1.06 ton/ha. This level is also very low compared to the
potential which could go up to 4 ton/ha if improved
varieties are used. The last ten years trend in the
productivity level has grown from 0.92 ton/ha in 2001/02
to 1.85 ton/ha in 2011/12 (Table 1). During this period
average productivity level has been doubled.
Available Soya bean Technologies
Though, increased productivity cannot be associated with
purely to research, the contribution of research outputs in
terms of improved varieties and associated agronomic
practices takes the lion share of improvement. The trend
in yield for major cereals show considerable increase in
the last ten years which is highly associated with the use
of seeds of improved crop varieties, application of
fertilizer and better extension services.
Ethiopian Agricultural Research System (NARS) since
1982 released 20 new Soya bean technologies which are
important for farmers, pastoralists and semi-pastoralists
(Table 2).
Soy bean demand and supply for 2012
Demand and Supply
The production for 2012 is 66 885 tons; this is an
estimation based on last year’s production and expert
opinion. The demand is 68 900; excluding export, WPF,
household processing. Market demand is consistently
increasing. Lots of poultry farmers are coming, Indian
investors, French, German investors are also entering
soy and related products.
Price Trends
In 2012 the domestic price has gone down by 128% over
the last six months from 1200 USD/MT to 528 USD/MT.
In October there was a huge gap between domestic and
international price but now the gap has closed.
Processors are happy with prevailing price but producers
are demotivated; partly because of the high expectation
3
Hailu and Kelemu 479
Table 1. Soy bean Production and area coverage in Ethiopia (2000/01-2011/12).
Production Year Area coverage (Hactare)
Total Production
(ton) Productivity (ton/ha)
2001/02 1,769 1620.5 0.92
2003/04 1,027 457.4 0.45
2004/05 2,606 833.5 0.32
2005/06 3,326.52 3811.89 1.15
2006/07 6,352.46 5848.95 0.92
2007/08 7,807.40 8400.64 1.08
2008/09 6236.04 7898.9 1.27
2009/10 5,678.69 7205 1.27
2010/11 11261 15824.42 1.41
2011/12 19397 35880.29 1.85
Source: Central Statistical Agency
There was no data available for both area coverage under soy bean production and total volume of production for the years
2000/01 and 2002/03.
Table2. Number of released Soya bean Technologies.
Year No of released
2013
2012
1
3
2011 2
2010 3
2008 2
2007 2
2005 1
2003 3
1982 3
Total 20
Source: Ministry of Agriculture 2013
following the unusual historic price.
Some producers noted high price variation across
geographic areas as bigger concern over the decreasing
trend; in areas where there is a better infrastructure and
market information prices are high and stable but in the
remote ones such as Metekel the reverse is true. It was
also highlighted that the comparison of domestic vs
international should qualify the fact that whether the
international market is for GMO or non GMO products.
For GMO, price is low (Figure 1). We need to see what
the price is for non GMO soy. It could be even higher
than domestic price.
Demand Projection
Following the requirement for protein supplement food for
different end-users, the domestic demand for DSF is
assumed to increase by 5%. With regard to export, the
country’s intent in advancing the industrial sector has
been considered, and; therefore, a conservative estimate
of 10% growth assumed in the future. Having taken the
above indicated DSF requirement and exports, the
domestic and export demands are projected in Table 3.
Types and Volume of Soy bean Products Imported
Soy bean grain, soya sauce, Soy bean edible oil, Soy
bean flour and meal and non-edible oil were the only
types of soy bean products imported during the last 12
years. Edible oil takes the lion share of the proportion
from the total imported volume of Soy bean products.
Edible soy bean oil takes more than 84% of the total
volume Ethiopia’s import of soy bean products. Based on
the last ten years imported volume data, Ethiopia on
average import more than 15 million Kg soy bean was
products every year. The volume of imported edible oil
4
480 Res. J. Agric. Environ. Manage
0
500
1000
1500
0
500
1000
1500
Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12
Price USD/MT
Month
International
Domestic
Figure 1. Price Trend for Soybean for International and Domestic Market.
Table 3. Demand Projection (tons).
Year Domestic Demand Export Demand Total Demand
2014 8,670 2,674 11,344
2015 9,103 2,942 12,045
2016 9,559 3,236 12,795
2017 10,037 3,559 13,596
2018 10,538 3,915 14,453
2019 11,065 4,306 15,371
2020 11,619 4,737 16,356
2021 12,200 5,211 17,411
2022 12,810 5,732 18,542
Source: Central Statistic al Agency
has been very high especially in 2003 and started to
decline then after. However the overall trend in the
volume of edible oil has decreased whereas the trend for
other products is more or less stable. This declining trend
of imported volume of edible oil is particularly because of
increasing level of domestic production of various edible
oil products made from other oil crops which led to
substitutions of some volume of soy bean edible oil
imported from abroad. This is attributed to the increasing
number of oil factories flourishing in different parts of the
country. Increased domestic production of other oil crops
such as linseed and sesame and expansion of value
addition on locally produced oil crops have resulted in
increasing substitution trend of imported soy bean oil.
Equivalent to the volume, the total value of edible soy
bean has also the biggest share of the total amount of
USD Ethiopia spent for importing soy bean products.
Annually Ethiopia on average spend 11 million USD for
importing various soy bean products out of which more
than 74% of such amount of USD spend for import of
edible oil (Figure 2).
Performance of Soy bean Export and trend
Export of Soy bean in Ethiopia has been started in 2004
and there was no record of export of any soy bean or soy
bean products before 2004. Ethiopia is exporting only soy
5
Hailu and Kelemu 481
0
10000
20000
30000
40000
50000
60000
70000
80000
Tons
edible soya bean oil
Soya bean flour and meal
Soy bean
Figure 2. Trend in the Volume of Imported Soy bean Products.
Source: Based on data obtained from FDRE Customs Authority and CSA
0.000
1000.000
2000.000
3000.000
4000.000
5000.000
6000.000
7000.000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Tons
Total volume
Figure 3. Trend in total volume of soy bean grain exported.
Source: FDRE Revenue and customs authority
bean grain and no other processed products of soy bean
are started to be exported. The emphasis given
domestically to value addition activities on soy bean to
produce various products such as edible oil, sauce and
other non-edible products have been very limited. The
last ten years trend in the volume of exported grain of soy
bean has been increasing. At the year 2008 the highest
volume of export has been registered and has imme-
diately declined in a significant amount. The average
volume of annual soy bean export is 1.4 million Kg. This
export volume is very far from the volume of imported soy
bean products. The trade deficit which is the difference
between imported and exported volume of soy bean is
about 138 million Kg. This shows that there is a huge
demand in the domestic market for soy bean products
and give warranty for local investors to engage in soy
bean production (Figure 3).
Trend in Value-to-Volume Ratio (VVR) for Imported
and Exported Soy bean products
The trend in the import value-to-volume ratio (VVR) is
also an indicator of whether the product is either
6
482 Res. J. Agric. Environ. Manage
Table 4. VVR for imported soy bean and products/by-products (USD/kg).
Year
Value-to- Volume Ratio for major imported soy bean products (USD/kg)
Soya sauce Edible Soy bean oil Soy bean flour and meal Soy bean grain
2000 1.081 0.553 0 0.379
2001 0.995 0.588 2.049 0.506
2002 1.847 0.558 0 0
2003 1.107 0.160 0.704 0
2004 1.097 0.865 0.424 0.435
2005 1.297 1.039 0 0.378
2006 0.963 0.789 0 0.367
2007 1.337 0.990 1.859 0.656
2008 1.365 1.344 0.626 0.630
2009 1.034 1.360 5.947 0.784
2010 1.206 1.414 1.888 0.668
2011 0.990 1.770 1.493 0.748
Average USD 1.19/kg USD 0.95/kg USD 1.9/kg USD 0.62/kg
Source: Based on the data obtained from FDRE R evenue and Customs authority
becoming expensive or cheap in the international market
showing the importing country if have significant
dependent on imported product is most likely to increase
it expenditure and widen its trade deficit. Higher VVR has
also implication for stimulating domestic production as it
is a signal of high demand in the local market for the
commodity in question (Jagwe and Owuor, 2004).
The VVR for edible soy bean oil, soy bean flour and
meals and soy bean grain has shown increasing trend
during the last 12 years. Whereas the VVR for soya
sauce has shown stable trend during the same period.
VVR for soy bean flour and meal in the year 2000, 2005
and 2006 and VVR for soy bean grain in the year 2002
and 2003 was zero and this is because of the fact that
there was no export of these products in the specified
years.
The average VVR for soy bean flour and meal is the
highest of all other products followed by soya sauce and
edible oil respectively. Soy bean sauce and meal has the
highest average VVR shows that the country is importing
1kg of soy bean sauce and meal at 1.9 USD followed by
edible oil for which 1.2 USD is spent for import of 1 kg of
edible oil. The total average VVR which show the amount
of foreign currency Ethiopia is spending for importing 1 kg
of soy bean product is USD 1.16 (Table 4).
The trend in the export value-to-volume ratio (VVR) is
an indicator of whether the product is either gaining or
losing value from movement in world prices. It gives an
indication of the extent to which the product can be
considered a relatively high-value export. In other words,
VVR is the amount of local currency (e.g. Birr) earned
from a Kilogram of export item over time and calculated
by dividing total value (in Birr) by total volume (in
kilogram) of the export item. The average VVR value for
soy bean grain based on the last ten years average is
USD 0.66/kg.
Accordingly The VVR trend for exported soy bean has
been growing slightly. As a result of this the volume of
exported soy bean has been increasing steadily during
the same period (Table 5). Excluding the year 2004
which has higher VVR that vary very much from sub-
sequent years, the average VVR for exported soy bean
during the last 7 years has been 0.463.
By-products of soybean traded and their trend
The data obtained from the revenue and custom authority
shows that there has been no export of soy bean by-
products such as soya oil and soya cake. But processors
are supplying soya cake in local market for animal feed
particularly for dairy and poultry farms.
The benefit of soy as animal feed ingredient is strongly
appreciated by the factories. However; increasing price of
soy and soy cake could force them to shift to less nutri-
tious but cheaper substitutes such as maize. However
the substitutes do not have the protein content as that of
soy, which makes substitution quite challenging. Given
that the cake is the main raw material for the animal feed
industry, the potential for soy consumptions depends on
how much soy is used by the edible oil and nutritious
food factories that sell the cake as a by-product.
Major factors that can explain the trends in soy bean
trade
Between the period 2007 and 2010 the volume of
imported edible oil has been decreasing. This is because
of increasing price of edible soy bean oil in the
7
Hailu and Kelemu 483
Table 5. VVR for exported soy bean.
Year Total Volume Total Value VVR
2004 1,331,441 2,749,164 2.064803
2005 588,208 214,277 0.364288
2006 90,537 36,780 0.406243
2007 1,195,845 659,638 0.551608
2008 6,281,307 2,879,141 0.458367
2009 462,010 226,123 0.489433
2010 357,284 175,596 0.491475
2011 1,004,496 484,863 0.482693
0
5
10
15
20
25
30
35
40
45
Bahrain
Djibouti
India
Indonesia
Italy
Kuwait
Netherlands
Philippines
Saudi Arabia
Singapore
Sudan
United Kingdom
USA
Vietnam
Yemen
Prcentage
Export destination countries
Percentage
shareof total
Volume Exported
Figure 4. Percentage share of total Volume Exported by destination countries (2004-2011).
international market. During the same period government
was intervening in the market through supply of other
edible oil at cheaper price to stabilize price in local
market. Around mid 2011, government removed its
program to supply cheaper edible oil ten the volume of
imported oil started to rise up.
The Volume of export has been increasing in general
sense and this is associated with the incoming of
investors which has better access o international
markets. In addition the growing demand for soy beans
both in local and export market. The demand for local
market is resulted from the demand for soy cake to be
used as animal feed in different livestock farms. This can
be seen from the increasing amount of hectare of land
under soy bean cultivation and the increasing total
volume of production during the last 7-10 years.
Destination countries for Soy bean Export
Australia Bahrain, Djibouti, India, Indonesia, Italy Kuwait,
Netherlands, Philippines, Saudi Arabia, Singapore,
Sudan, USA and Vietnam are countries Ethiopian soy
bean exports are destined during the last ten years.
Sudan, Indonesia, Djibouti, Netherlands and Vietnam are
the highest volume recipient countries for Ethiopian soy
bean export with the percentage share of 42%, 21%,
12%, 9% and 4% respectively. The total volume of export
destined to Sudan during the period 2004-2011 is 5,138
ton and the total volume exported to the second large
recipient country Indonesia has been 2,611 ton (Figure
4).
United Kingdom, Netherlands, USA and Bahrain are
the destination countries from which highest value/kg from
soy bean export is received. Ethiopia earn USD 2.96/kg
from export of soy bean to United Kingdom and USD
2.20/kg from Netherlands. The export value of 1kg of soy
bean per kg for export destined to largest recipient
country of Ethiopian soy bean export- Sudan is USD 0.45.
Regarding import, Italy, USA, Egypt, Turkey and
Malaysia are countries where Ethiopia imports largest
proportion of volume of Soy bean and soy bean products.
Accordingly, more than 85% of imported soy bean/by-
products comes from these five countries. Italy takes
one-third of the total volume of imported volume (Figure
5).
8
484 Res. J. Agric. Environ. Manage
0
5
10
15
20
25
30
35
40
Italy
USA
Egypt
Turkey
Malaysia
UAE
India
Singapore
Belgium
Canada
Netherlands
Argentina
South Africa
China
Bulgaria
Malawi
Germany
Japan
Kenya
Iran
Portugal
Oman
France
Djibouti
Percentage
Country of Origin for imported soy bean
Percentge share
for total import
Figure 5. Percentage share of total import by country of origin (2000-2011).
Major Constraints of Soya bean Production
Although soybean breeding and production have been
going on in Ethiopia since the 1950’s, it was not easy to
achieve wider dissemination and production of the crop.
The main limitations were lack of know-how of the local
farmers on the utilization aspect of the crop, unavailability
of attractive market for the produce, and lack of
systematic approach in popularizing the crop, which
emphasized training farmers on the production of
soybean, its utilization, and market potential. Conse-
quently, the land allotted for growing soybean in the
country was limited for several years. The following are
also major problems that are attributable to low level of
soy bean production in the country.
i. The soybean scaling-up effort has not been consistent
ii. Weak market linkage between producers, processors,
exporters and consumers
iii. Limited use of improved varieties,
iv. Limited knowledge in use of soy bean in cropping
system
CONCLUSIONS AND RECOMMENDATIONS
More and more domestic and foreign investors are
moving into large scale farming in Ethiopia. The size of
these large scale farms under production range
anywhere from a few hundreds to thousands of hectares.
Some farmers are producing only soy bean, others have
a number of crops on their lands. As these farmers most
of the time are not linked to any specific product chains,
the crop they produce might change from year to year
based on the prices prevailing in the markets for the
different produce. This makes specialization, internalize-
tion of production technologies, collection of market
information, linking to buyers much harder, as year by
year the farms have to deal with another crop. Linking
large farms to soy processors would create the
opportunity for them to engage in more market and buyer
specific production as far as volume and quality are
concerned, and contribute to satisfying increasing
demand for soy.
It is very crucial to link commercially oriented small and
large scale farmers to value chains. This means,
industries engaged in processing of oil crops to produce
edible oil need to be supported or encouraged to start
processing soy bean. This need to be linked with a group
of soy bean producing farmers. Farmers need to be
linked with soy bean processing factories as a result
market is secured for farmers to become interested to
engage in soy bean production. Promote soy production
and processing among small holders, engaged in
subsistence farming, for food security purposes.
REFERENCES
CSA (Central Statistical Agency of Federal Democratic
Republic of Ethiopia), 2000-2012. Annual report.
FAO (2010). Food outlook. Oil Seeds Business
Opportunities Ethiopia, 2009; J.H.M. Wijnands, J.
Biersteker, E.N. van Loo.
Hailegiorgis, B. (2010) Export performance of oilseeds
and its determinants in Ethiopia. Haramaya University,
College of Agriculture and Environmental Science,
Department of Agricultural Economics.
Jagwe, J., Owuor, G. (2004). Evaluating the marketing
opportunities for soybean and its products in the East
African countries of ASARECA: Kenya Report.
International institute of Tropical Agriculture-
FOODNET.
Osho, S.M. (1995). Soybean processing and utilization
research at International Institute of Tropical
Agriculture. Processing from SOYAFRICA’95:
Johannesburg, South Africa, 4-5 October 1995.
