DESPITE the growing supply of cooking oil on the domestic market, producers are finding it difficult to tap into export markets due to un-competitiveness of the commodity.
Oil Expressers’ Association of Zimbabwe, a lobby group representing seven members said import restrictions imposed by the Government in the past few years have helped the revival of the industry with average production now 33 percent above local demand.
Over the past few years, Zimbabwe had been importing cooking oil worth $220 million annually as local producers struggled to satisfy local demand. The local firms are producing 15 000 tonnes of cooking oil per month against the demand of 10 000 tonnes.
“We have saturated the local market and all the players are now looking at exporting the surplus,” OEAZ president Mr Busisa Moyo told The Herald Business yesterday.
“It is a natural progression but our biggest challenge is our product will be 45 percent more expensive and that is why we are pushing for internal devaluation to be competitive.”
Government recently appointed the National Competitiveness Commission board to look into issues affecting productivity and to
recommend changes to enhance competitiveness.
Mr Moyo, who is also the CEO of United Refineries – a Bulawayo based cooking oil company, said there was also need to boost soya bean production to reduce production cost.
“We have to produce our own soya beans, at a very efficient cost to reduce the imports,” he said.
Zimbabwean farmers produce an average of 30 000 tonnes of soya bean per year, against demand of about 300 000 tonnes. Some local cooking oil producers have started contracting local growers to increase soya bean production to reduce reliance on imports.
Even though soya bean is scarcely available on the local market, some cooking oil producers have been opting to import at a much lower price with Government now considering reducing import licences to encourage local procurement of the commodity.
Government is buying soya beans for $500 per tonne whereas the imported product is selling for $370 per tonne. Agriculture, Mechanisation and Irrigation Development Minister Dr Made said while Zimbabwe had not produced enough soya beans this year, the Government wanted the available crop to be exhausted before importing.
“We are moving to limit the importation of soya beans into the country to cater for our local farmers who have the same product, if not better quality than imported soya. We have engaged the Industry and Commerce Ministry to reduce soya beans import permits to ensure cooking oil manufacturers buy for the local farmers,” Dr Made said recently.
The country now has seven medium to large cooking oil manufacturers, including ETG Parrogate in Harare and Willowton in Mutare, both commissioned in the past 12 months.