Zimbabwe should brace for a shortage in cooking oil following a 60% increase in crude oil prices in the international markets to US$1650 per tonne and the failure by oil expressers to get the bulk of their foreign currency requirements on the auction system, Business Times has learnt.
The recent increase in crude oil prices from the US$1000 that prevailed in December presents a headache to oil expressers who are getting half of the US$4m required per week on the auction market.
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$415 per 2 litres bottle from about ZWL$374 two weeks ago.
Industry players told Business Times this week that the sector’s capacity utilisation has since halved to 20% from 40% in December 2020 due to crippling shortages of raw materials.
Oil Expressers Association of Zimbabwe president, Busisa Moyo, said a shortage was imminent adding that the central bank should move in line with crude oil price increases.
“We are not getting enough forex from the auction market as the central bank continues to give us the same amount despite a 60% increase in crude oil prices (on the international market). Therefore, we are getting by far less tonnage than we require,” Moyo said.
He said the cooking oil industry players have engaged the central bank which continues to allocate US$2m a week to the sector players.
According to the findings of the first round of the Livestock and Crop assessment conducted by the Ministry of Lands, Agriculture, Fisheries, Water and Rural Resettlement, soyabeans hectarage was 136% up to 79 359 hectares during 2020/21 summer cropping season from 33 599 hectares planted in the prior season.
Output for soyabeans in April this year, which is one of the critical raw materials for the local oil companies were estimated to be 71 000 metric tonnes, a 78% increase from 40 000 metric tonnes in 2020.
Some cooking oil firms are already utilising the local soyabeans.
Recently, the government pegged the price of soya beans at ZWL$48 000 per tonne.
Moyo said there was a need for a review of the price.
He said with other players accessing soyabeans at competitive prices, more crops are expected to be delivered to the Grain Marketing Board and various companies’ premises.
-Business Times