Cash shortages hit cooking oil sector

HARARE - Cooking oil producers anticipate a 30 percent slump in production from the current 8 000-10 000 metric tonnes (MT) being manufactured per month, on the back of payment delays to the sector’s suppliers.

United Refineries chief executive Busisa Moyo last week told the businessdaily that payments to raw material suppliers were not being processed fast enough, a situation that has led to delays in the delivery of crucial raw materials to players.

In the wake of cash shortages, banks have been unable to meet local as well as foreign account demand.

“Of course, we are very concerned about the issue because payments are not being prioritised and payments are not going through fast enough despite the fact that we are in the top 10 of the central bank’s Import Priority list,” he said, on the side-lines of a Confederation of Zimbabwe Industries Annual General Meeting.

Moyo said May’s output was expected to nosedive, sparking fears of a cooking oil shortage after government last year came up with a raft of measures banning cooking oil imports to support local pressers.

“In May, we are expecting a significant drop in output of between 20 to 30 percent . . . Monthly, we produce anything between 8 000 to 10 000 MT which is between eight million to 10 million litres,” he said.

Presently, pressers are failing to secure key raw materials from foreign countries as the country’s banks have low nostro account balances.

A nostro account is a bank account held in a foreign country by a domestic bank mainly to facilitate settlement of exchange and trade transactions.

Thus, when pressers make orders, their respective banks then have to pay the suppliers through the nostro account.

In Bulawayo, supermarkets have already started rationing cooking oil purchases.

Oil Expressers Association of Zimbabwe (OEAZ) president Sylvester Mangani also echoed Moyo’s sentiments at a ministry of Industry meeting on Friday saying the situation — if it continued unabated — was going to lead to a shortage of the product locally.

“At the moment, payments are taking long and raw materials are not getting to us in time due to this. You know, when it came to the ministry’s attention, the first thing they asked was if the country had to start importing cooking oil.

“This disappointed me very much; all that needs to be done is for payments to be prioritised so that raw materials get to us on time. We have already proved that we can meet local demand with a surplus,” he said.

In the wake of a Priority List released by the central bank recently, oil pressers are not in the top three categories.

This means their imports do not receive priority funding status from banks.

Mangani said the exclusion of cooking oil manufactures from the list indicated policy inconsistency on the part of government.

“This points to the issue of policies within government not complementing each other. When one department gives us priority and allowance to produce, general expectation only points to the rest of government departments to recognise this,” the OEAZ chief said.

Comments (1)

How about stopping the smuggling of goods across the borders. Chickens , eggs , cooking oil ,second hand clothes in. Gold and cash out. Millions in lost revenue and countless jobs lost.

Huku farmer - 31 May 2016

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