Zimbabwe is facing fresh cooking oil shortages following a sharp increase in edible oil prices on the international markets and foreign currency shortages leading to viability challenges for the sector, Business Times has learnt.
Despite the spike in edible oil on the international market the Reserve Bank of Zimbabwe (RBZ) still gives oil expressers the same amount from 2020.
Some oil companies are now forced to source the forex from the parallel market, where premiums are higher, insiders said this week.
Consequently, the price of cooking oil has shot up to about ZWL$1,115 per 2 litres bottle from about ZWL$920 two weeks ago.
“We have silent cooking oil shortages in the country as there are some areas where there is no cooking oil on the shelves and in instances where prices are now way above ZWL$1,000 per 2-litre bottle.
“RBZ continues to give us US$500 000 per week since 2020 yet it knows that edible oil prices have gone up 111% to ZWL$2000 per tonne from US$950. This is a recipe for shortages,” a source close to the developments said.
Harare-based cooking oil companies are mainly supplying the northern side of the country with United Refiners Limited supplying the Bulawayo side.
Oil Expressers Association of Zimbabwe president, Busisa Moyo told Business Times that the cooking oil players are facing viability challenges.
“The industry faces various challenges hence it is not surprising if the supply is outstripped by the demand,” said Moyo, the United Refineries Limited (URL) CEO.
In a survey conducted by this publication the URL manufactured cooking oil, Roil, has not appeared on 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,” Moyo said.
Oil expressers are currently producing less than half of the 2m litres of cooking oil required per week.
The cooking oil sector requires between US$8m and US$12m a month but it has gotten US$3m for foreign payments from the RBZ.
This has left a deficit of between US$5m and US$8m a month which is not so good for the industry.
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.
But the sector is wary of the soyabean prices which have gone up to around US$640 a tonne from US$350 last year, a situation that will push cooking oil prices.
It could not be established how much money the RBZ was 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.