Cooking oil industry engages RBZ

Cooking oil industry engages RBZ
Published: 02 June 2022
The cooking oil industry has engaged the Reserve Bank of Zimbabwe (RBZ) to review the weekly allocation of US$500 000 per member at a time when the edible price has more than doubled due to opening up the world economy after two years of Covid-19 siege.

Edible oil prices have risen to US$2000 per tonne from US$950 a year ago.

The situation has been worsened by the Russia- Ukraine war which has created a huge demand for the product as the two warring parties are the largest suppliers.

The cooking oil sector requires between US$40m a month but it is getting around US$16m per month from the monetary authorities, which is less than half of the requirements, a situation which has caused shortages in the market.

"We have lobbied for an adjustment of the weekly amount as part of food security measures given the global supply dynamics so we are not closed out and unable to secure stocks later in the year post harvest," the Oil Expressers Association of Zimbabwe president Busisa Moyo told Business Times.

Zimbabwe needs 2m litres of cooking oil per week and the oil expressers are producing less than half.

Moyo said this has left a deficit in the market causing the shortages in the process.

"From a sales point of view our members are also starting to see offers from the retail and wholesale trade for offers to buy edible oils in US$ and Rand which reduces dependence on auction and interbank but dollarises the value chain," Moyo said.

He said in the medium term, some of members continue to focus to soyabean farmer contracting under its sister association the Food Crop Contractors Association of Zimbabwe with only 20% of the 100,000 hectares of soya beans grown yearly.

Moyo said there is also an initiative led by the Ministry of Agriculture to increase sunflower output in the coming years which is more climatically aligned to Zimbabwe oilseed production.

Zimbabwe has only three oilseed sources; soya beans, cotton seed and sunflower seed at a time when there are 72 commercially viable oilseeds globally these include maize, groundnuts, canola, rapeseed, sesame, olives and palms among others.

"The expansion of oilseed production requires programming, farmer training, enhancing policies and financial support to achieve resilience to avoid further supply shocks in future," Moyo said.

Harare based cooking oil companies are mainly supplying the northern side of the country with United Refiners Limited supplying the Bulawayo side.

Moyo said industry faces various challenges hence it is not surprising if the supply is outstripped by the demand.

In a survey conducted by this publication the URL manufactured cooking oil, Roil, has not appeared in Harare shelves since the start of the year.

"We have serious viability challenges as our supplies can only reach Shangani from Bulawayo with other areas not covered," URL chief executive Moyo said.

The oil expressers are looking forward to soyabeans output as the 2021/2022 summer cropping is slowly coming to an end.

Despite the erratic rainfall patterns, the soyabean hectarage was said to be better than last year with output also expected to be good.

The cooking oil players are also worried that the soyabean prices have gone up to around US$640 a tonne from US$350 last year, a situation which will push cooking oil prices.

It could not be established how much money the RBZ is considering to allocate to the cooking oil producers for foreign payments backlogs as the RBZ governor John Mangudya's mobile number went unanswered by the time of going to print.
- Business Times
Tags: BusisaMoyo, RBZ,


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