ZIMBABWE’S edible oils sector says it remains viable inspite of intermittent stockouts, but faces challenges related to low soya output and a persistent shortage of foreign currency to maintain optimal supply, according to an association which represents producers.
Some of the biggest oil producers include United Refineries, ETG Parrogate, Surface-Wilmar, Olivine and Willowton. Oil Expressers Association of Zimbabwe president Busisa Moyo also revealed, in an interview with NewsDay that the sector was too “saturated” to accommodate new entrants.
“The industry is now saturated, but we need to grow more soyabeans as we need 240 000 tonnes per year versus the current 60 000 tonnes produced by our farming community,” Moyo said.
“Government needs to give Treasury Bills (TBs) as security for farmers to access loans from banks since 99-year leases are still not bankable,” he said.
The edible oils industry has recovered significantly since the introduction of Statutory Instrument 64 of 2016, which bans the importation of cooking oil and other fast-moving consumer goods. The country, which has a monthly requirement of 11 500 tonnes of cooking oil, has previously relied on cheaper imports mainly from neighbouring South Africa.
In the first two years of dollarisation, retailers reported that imports accounted for up to 60% of domestic retail stocks.
Local edible oil producers reportedly have the capacity to supply 12 000 tonnes of cooking oil per month, which is more than enough to meet local demand of 10 000 tonnes.
Moyo said the industry would sustain supply if foreign currency allocations to the sector increased.
The sector is currently receiving just 30%-40% of its foreign currency requirements, according to Moyo, who also requested the new Minister of Industry and Commerce, Nqobizitha Mangaliso Ndlovu, to intervene.
Cooking oil is one of the 16 commodities constantly monitored by government.
Moyo cited contract farming for soyabeans, sunflower seeds and other oil seeds used in the production of edible oils as one of the intervention measures government could consider to stimulate domestic input supply.
“(The new Industry minister should) assist in allocating land for joint venture farming projects near large water bodies,” Moyo said.
“He should also improve the links between primary production in agriculture or mining and industry to create jobs.
He should also work to promote procurement efficiencies that are not foreign currency-dependent, enhance export competitiveness, assist in well-structured re-tooling fund to upgrade industrially and achieve sustainable industrial excellence through innovation and Blue Ocean strategies at national level.”
-Newsday
