Cooking oil industry requires US$40m

LIVINGSTONE MARUFU

Zimbabwe’s cooking oil sector needs about US$40m a month to import critical raw materials such as crude oil and soyabeans to improve supply of the product.

Oil Expressers Association of Zimbabwe president Busisa Moyo said local production was inadequate hence the need for imports to plug the gap.

“The industry requires US$40m monthly to procure enough raw materials for the cooking oil, soaps and cattle feed,” he said, adding that delays in settling forex  allotments have further complicated the situation.

Moyo said local  production was not adequate hence the need to import.

Producer price soyabeans producer price was increased to ZWL$171 495 up from ZWL$125 530.

“The country is expecting to harvest 80 000 tonnes of soyabeans from 60 000 tonnes last year but the output is  just 20% of the crude oil required in the sector.

“The problem is that the 80 000 tonnes of soybeans are not crushed at  once as the farmers are demanding US$  for their crop which further complicates the already delicate situation,” Moyo said.

The development comes at a time when the industry is not fully utilising letters of credit (LCs) to procure raw materials amid revelations foreign banks no longer want to act as guarantors for local companies due to the country’s high risk.

The LCs  are supposed to complement the foreign currency auction system but the two have failed to help the local industry to import enough raw materials  for their operations due to  limited foreign currency.

Moyo said: “We have LCs which are a huge problem as they are erratic and the confirmations come very late which make the industry unviable.

“The LCs are worse than the auction as one puts the ZWL$ cash cover which takes about three to four months before confirmation.

“The LCs do not have the charges but you will lose the raw materials  to the other customer who has cash.”

The cooking oil producers require 20 000 tonnes  of soyabeans per month.

Eggs, chicken and pork availability will be negatively affected as these depend on soya meal as the base protein source while day-old chicks and other meat sources.

Zimbabwe requires 2m litres of cooking oil per week.

Owing to the shortages of soya bean, cotton and sunflower, the cooking oil manufacturers will be forced to import more edible  oil