Zim clocks $4m cooking oil import bill monthly

14 Sep, 2014 - 07:09 0 Views
Zim clocks $4m cooking oil  import bill monthly

The Sunday News

ZIMBABWE is spending more than $4 million per month importing cooking oil in spite of reported increased capacity by local seed processing companies, an official has said.
In an interview in Bulawayo last week, United Refineries chief executive officer Mr Busisa Moyo said the cooking oil imports were contributing to a high import bill.

“The country is spending about $4 million per month in importing cooking oil and if we add fats to that that’s another $2 million. From January to June the country had used about $60 million to import cooking oil,” he said.

Mr Moyo, who is also the Matabeleland Chamber of Industries president, applauded the Government for coming up with a raft of policies that he said would reduce the cooking oil imports.

“We are glad that the minister (of Finance and Economic Development Cde Patrick Chinamasa) has introduced a new raft of changes on duties. We don’t necessarily need to protect local industry but support it because we are importing more than we are exporting,” said Mr Moyo.

Cde Chinamasa in his Mid Term Fiscal Policy Review on Wednesday last week announced measures to increase duty on cooking oil, poultry, soap, mealie-meal, flour beverages, dairy products, furniture, sugar and fresh foods among other things.

Mr Moyo said local companies had the capacity to meet demand of those products.
“We do have the capacity to meet the local demand. Local companies can produce about 7,5 million litres a month comfortably without adding any additional capacity against the country’s total demand of seven million litres,” he said.

He said the challenges that the local companies had faced in the past years had created a gap for imports.
“When the local industry was going down, when we had no raw material and you find that during that period we opened a door for imports and these imports had become comfortable and relationships had been created and there were some people with franchise agreements and consignment stock arrangements who were rejoicing on the fact that the we did not have a local cooking oil industry. Now that the local cooking oil industry is up we need to act in accordance,” said the official.

He said there were three companies investing in the cooking oil industry following the introduction of import duty on cooking oil.

“With the new legislation that has been set up by the Government, so far there are three companies investing in the cooking oil sector which shows what happens when you create the right policies,” said Mr Moyo.

“Wilmer has now invested in the country and another one has now invested in United Refineries. There are potential investors eyeing Olivine and ETG (Export Trade Group) from Tanzania has also invested in one cooking oil company. Investors now know that there is a duty and are now investing in the sector and that’s exactly what we want,” said Mr Moyo.

He said local cooking oil prices were competitive and would even go down if they were supported.
“The prices are competitive and if producers produce more of the product the price will come down. If we keep importing we will have a higher fixed cost per unit. The local manufacturers can’t produce large quantities if they are not supported and we want to produce large volumes so that the price will come down,” said Mr Moyo.

He highlighted the major challenge that companies were facing was shortage of raw materials.
“Raw materials are in short supply and the soya bean can only satisfy 50 percent of the local requirement and cotton only 40 percent so we have got big gaps but we are saying let’s import not the finished product but the raw materials,” said Mr Moyo.

A snap survey carried by the paper in Bulawayo revealed that imported cooking oil was still common in many shops.
In an interview, a manager with a supermarket said they were selling the imported cooking oil as it was in higher demand than the local one.

“We still sell imported cooking oil because our customers still want these imported brands compared to those locally produced,” said the manager on condition of anonymity.

“As you can see we have local cooking oil but most customers want the South Africa one and we don’t know why. Maybe they are now used to it,” said the manager.

Recently Buy Zimbabwe general manager Mr Munyaradzi Hwengwere said in Bulawayo that people must start supporting locally produced goods to create employment.

He said the continued imports were contributing to a high import bill resulting in increase in trade imbalance.

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