News / National
Panic as cooking oil vanishes again
17 Oct 2017 at 09:31hrs | Views
There is once again growing uneasiness in the market as the country has been hit by another shortage of cooking oil, which retailers blame on oil manufacturing companies - who are said to be selectively supplying a few "favoured" outlets.
At the same time, the Oil Expressers Association of Zimbabwe (OEAZ) - a grouping of seven producers who supply 95 percent of the country's edible oils - has in return accused retailers of unjustifiably increasing the price of cooking oil to consumers.
Consumers first experienced the shortage of cooking oil last month when they swamped shops after bond notes sharply lost their value against the United States dollar on the parallel market.
Then, this coincided with the attendant shortages of fuel and drugs - which all evoked bad memories of the 2008 hyperinflationary era.
Speaking to the Daily News yesterday, Confederation of Retailers president, Denford Mutashu, said retailers were not going to reduce their prices as the current crisis was not of their making.
"There are many retailers failing to get cooking oil. It's not being accessed by all retailers, but a few selected, chosen ones. Why are they (manufacturers) not making it open?
"Let's not blame retailers. We have been supporting them (suppliers) well, but if they keep blaming us it is out of order. It's critical to look at things in their right perspective," Mutashu said.
"If there are retailers taking advantage, it simply means that there is no sufficient supply. That's the challenge we have in the country.
"We have a section that is failing to supply cooking oil in abundance, and which is trying to vindicate itself by blaming price increases on wholesalers and retailers. This business of shifting blame must stop," Mutashu added.
Shortages of foreign currency have previously been cited by both retailers and the OEAZ, as a critical factor that is affecting production and supply.
According to the OEAZ, at least $5 million is required weekly to import soya beans, crude edible oils and other raw materials to meet the national demand for cooking oil and other related products.
But up to July 31, OEAZ members had only been receiving $2,2 million per week - or $8,8 million per month.
Between August and September, the Reserve Bank of Zimbabwe (RBZ) slashed further its allocation to the industry per week to $1,5 million - worsening the national shortfall.
The cooking oil shortages have been worsened by Statutory Instrument 64, which was imposed by the government last year, and which bans the importation of many basic consumer goods - including cooking oil, which was being supplied mainly by South African companies.
Meanwhile, OEAZ has raised concerns over the retail price inconsistencies in the market, warning both wholesalers and retailers to exercise restraint.
"While it is understood that crude cooking oil and soya beans are globally priced commodities and subject to regional price changes, the OEAZ has noted with concern the inconsistent pricing that is obtaining in the distribution channel.
"We urge all members, as well as the distribution channel (wholesalers and retailers) to exercise restraint over price increases," it said over the weekend.
Giving an update on the status of edible oil supplies, OEAZ admitted that the current situation was not ideal, and that it was making a consented effort to work with the ministry of Industry and Commerce, as well as the RBZ to improve the situation.
"The seven OEAZ members have a total installed capacity of 15 000 mt of edible oil per month, and can avert any product shortage, real or perceived, within 14 days, provided they access adequate foreign currency or credit line support for raw material procurement.
"The OEAZ will continue working with relevant authorities and stakeholders towards the development and strengthening of the soya value chain as part of the medium-to-long term solution to raw material supply challenges.
"This would contribute towards increasing agriculture production of soya beans, thereby reducing pressure on foreign currency demand to import this raw material in the coming years," it added.
"The ultimate goal of the OEAZ is to be export-competitive through the localisation of oil-seed production, re-tooling and economies of scale to supply valued-added products at affordable prices to consumers.," OEAZ said.
Many companies, including those on the authorities' priority list which import raw materials, have almost given up on the RBZ route as approvals of their foreign currency applications are taking long to bear fruit.
Zimbabwe is currently in the grip of a serious economic crisis which has resulted in severe cash shortages and the complete disappearance of US dollars from the formal market.
At the same time, the Oil Expressers Association of Zimbabwe (OEAZ) - a grouping of seven producers who supply 95 percent of the country's edible oils - has in return accused retailers of unjustifiably increasing the price of cooking oil to consumers.
Consumers first experienced the shortage of cooking oil last month when they swamped shops after bond notes sharply lost their value against the United States dollar on the parallel market.
Then, this coincided with the attendant shortages of fuel and drugs - which all evoked bad memories of the 2008 hyperinflationary era.
Speaking to the Daily News yesterday, Confederation of Retailers president, Denford Mutashu, said retailers were not going to reduce their prices as the current crisis was not of their making.
"There are many retailers failing to get cooking oil. It's not being accessed by all retailers, but a few selected, chosen ones. Why are they (manufacturers) not making it open?
"Let's not blame retailers. We have been supporting them (suppliers) well, but if they keep blaming us it is out of order. It's critical to look at things in their right perspective," Mutashu said.
"If there are retailers taking advantage, it simply means that there is no sufficient supply. That's the challenge we have in the country.
"We have a section that is failing to supply cooking oil in abundance, and which is trying to vindicate itself by blaming price increases on wholesalers and retailers. This business of shifting blame must stop," Mutashu added.
Shortages of foreign currency have previously been cited by both retailers and the OEAZ, as a critical factor that is affecting production and supply.
According to the OEAZ, at least $5 million is required weekly to import soya beans, crude edible oils and other raw materials to meet the national demand for cooking oil and other related products.
But up to July 31, OEAZ members had only been receiving $2,2 million per week - or $8,8 million per month.
Between August and September, the Reserve Bank of Zimbabwe (RBZ) slashed further its allocation to the industry per week to $1,5 million - worsening the national shortfall.
The cooking oil shortages have been worsened by Statutory Instrument 64, which was imposed by the government last year, and which bans the importation of many basic consumer goods - including cooking oil, which was being supplied mainly by South African companies.
Meanwhile, OEAZ has raised concerns over the retail price inconsistencies in the market, warning both wholesalers and retailers to exercise restraint.
"While it is understood that crude cooking oil and soya beans are globally priced commodities and subject to regional price changes, the OEAZ has noted with concern the inconsistent pricing that is obtaining in the distribution channel.
"We urge all members, as well as the distribution channel (wholesalers and retailers) to exercise restraint over price increases," it said over the weekend.
Giving an update on the status of edible oil supplies, OEAZ admitted that the current situation was not ideal, and that it was making a consented effort to work with the ministry of Industry and Commerce, as well as the RBZ to improve the situation.
"The seven OEAZ members have a total installed capacity of 15 000 mt of edible oil per month, and can avert any product shortage, real or perceived, within 14 days, provided they access adequate foreign currency or credit line support for raw material procurement.
"The OEAZ will continue working with relevant authorities and stakeholders towards the development and strengthening of the soya value chain as part of the medium-to-long term solution to raw material supply challenges.
"This would contribute towards increasing agriculture production of soya beans, thereby reducing pressure on foreign currency demand to import this raw material in the coming years," it added.
"The ultimate goal of the OEAZ is to be export-competitive through the localisation of oil-seed production, re-tooling and economies of scale to supply valued-added products at affordable prices to consumers.," OEAZ said.
Many companies, including those on the authorities' priority list which import raw materials, have almost given up on the RBZ route as approvals of their foreign currency applications are taking long to bear fruit.
Zimbabwe is currently in the grip of a serious economic crisis which has resulted in severe cash shortages and the complete disappearance of US dollars from the formal market.
Source - dailynews
