eBusiness Weekly
Business Writer
A combination of foreign currency shortages and reduced supplies of oil seed, has seen output of cooking oil in Zimbabwe declining by as much as 50 percent, an official said.
Oil Expressers Association of Zimbabwe chairman, Busisa Moyo, told Business Weekly in an interview on Thursday that cooking oil companies were failing to get enough forex to import crude oil while oil seed supplies had also been very low.
“We are not getting enough foreign currency to import crude oil while the supplies of oil seeds; soya beans and sunflower have been very low,” said Moyo.
This has resulted in production falling significantly…It would by between 40 and 50 percent.
“We, however, expect cotton seed supplies to start coming through in the next weeks (when cotton ginning season begins),” he said.
Moyo said while production has declined, the impact was not being felt because of the reduction in disposable incomes.
Fall in disposable incomes
“We should be having a serious shortage in the market because of this reduction but the impact is not being felt because demand has also fallen,” said Moyo, as incomes have been seriously eroded by inflation.
Inflation by products show that oil and fats in June 2022 increased by 308 percent compared to June 2021 and it increased by 46 percent in comparison in May.
While the average annual inflation for June was 191,6 percent and the average month on month inflation at 30.7 percent, oil and fats have increased by far much more.
On the same trend are bread and cereals, which on a month on month basis increased by 36 percent, well above the national average.
The price of cooking oil and bread is thus now out of reach for many people, especially those earning in local currency, despite them considered basic products by many consumers, a report by the Confederation of Zimbabwe Industries said.
The highest increase on a month on month basis was electricity, which increased by 218 percent from May 2022 to June 2022.
“Inflation will likely continue on an upward trend though the increase in interest rates is likely to dampen the growth trajectory,” said CZI.
However, the announced interest rates are more likely to be breached by inflation in this coming month, which would also call for further adjustments to curtail speculative borrowers.
“The end of year targets for inflation are no longer attainable and it is only natural that new targets will be announced in the forthcoming Mid-term Budget review.”
