In a statement released on Monday, the Oil Expressers Association of Zimbabwe (OEAZ), explained that the current cooking oil shortages and price hikes were a result of a decrease in foreign currency allocations by the Reserve Bank of Zimbabwe (RBZ). OEAZ notes that the central bank said that there is a shortage of foreign currency.
The association which is made up of seven companies, notes that RBZ was giving them The statement reads:
The country requires 8,500 metric tonnes (mt) of edible oils per month and 10,000mt of Soya Bean Meal (aka De-Solventised Oil Cake or Soya Oil Cake) used primarily for poultry feed. OEAZ, members require at least US$5m per week (US$20m per month) to import soya beans, crude edible oils and other raw materials to satisfy the requiremenls national demand for a and related products adequately. For the 28 weeks ended 31 July 2017, OEAZ, members have received US$61m which is US$2,2m per week (0,8m per month) which is 44% of what the sector requires to satisfy national demand.
The above foreign currency allocations have been further constrained to less than US$1,5m per week (i.e 30% of the sector’s actual foreign currency allocation requirement), this is possibly inked to reduced tobacco sales inflows et al. The above foreign currency allocation levels mean that OEAZ members’ credit lines for raw materials have now reached maximum levels and members can no longer access raw materials on credit from their foreign suppliers as they normally do.
Reserve Bank of Zimbabwe (RBZ) has advised the OEAZ that foreign currency is in short supply but has assured the association of its commitment to support the sector based on available foreign currency resources. It should be noted that the shortages in certain outlets in urban centres can be averted by immediately the extending of amount allocated as foreign currency or the extending of RBZ supported Letters of Credit to OEAZ members to allow for the importation of adequate raw materials and other inputs This is being worked on.
The OEAZ also wishes to advise that input and raw material costs have escalated dramatically in the last few months leading to price changes as local suppliers and service providers in particular have adjusted their costs upwards in light of the prevailing economic environment. The poor liquidity and scarcity of foreign currency has meant that the fast moving consumer goods such as edible oils have become a substitute for cash as a store of value to the informal trade and fueling higher demand and price inflation.