DELAYS in foreign payments have caused shortages of cooking oil on the market, with local manufacturers failing to pay for raw materials.
BY TATIRA ZWINOIRA
United Refineries chief executive officer and Confederation of Zimbabwe Industries (CZI) president, Busisa Moyo, yesterday told NewsDay they were experiencing delays due to lack of money from the banks to make foreign currency payments to suppliers.
“Foreign payment methods have been strained, as banks do not have money to pay our suppliers,” he said.
“We need assistance from the central bank to prioritise foreign payments so that we can pay our suppliers and adequately supply the market. We need these payments to go out.
“Once our payments are made and reach our suppliers, we can start providing cooking oil on time. In the past, the central bank has helped and we hope this can be done again.”
Moyo said a lobby group was working with Treasury and the Industry and Commerce ministry to ensure foreign payments were made.
He said they had already exhausted credit lines they had been offered by their suppliers, which they had been using to purchase raw materials to meet monthly demands.
In recent weeks, there has been a decline in sales of cooking oil brands such as Olivine, Red Seal, Royal and Pure Drop, with only Zimgold widely available.
Spar managing director Terrence Yeatman confirmed this, highlighting how Zimgold “is the dominant brand” in their stores.
“In regards to the oil situation, the main issue is the delay in external payments that the suppliers (Pure Oil, Surface Wilmar, United Refineries) and most customers (wholesale or retail) are struggling to offer the cash payments that these suppliers require,” he said.
The Oil Expressers’ Association of Zimbabwe says the country spends $220 million annually in importing raw materials.
Surface Wilmar, producers of Pure Drop cooking oil, chief executive officer, Sylvester Mangani, said they had stocks in their factory, but saw a decline in sales.
Asked why his product was not on the shelves, he said: “I will look into it . . .”
Zimbabwe National Chamber of Commerce president Davison Norupiri said the entrance of South African company, Willowton Group, later this month, will see an increase of cooking oil in the country, as the firm has capacity to supply the whole market.
Willowton, which produces D’Lite, will open its plant in Mutare.
Cooking oil imports have stopped due to the introduction of Statutory Instrument 64 of 2016, which bans the importation of cooking oil, building materials and other products into the country.
Confederation of Zimbabwe Retailers president Denford Mutashu said the central bank had been prioritising settlement of the external crude oil payments, since it is on the high priority list.
Oil producers have a capacity to supply 12 000 tonnes of cooking oil per month to meet the local demand of 10 000 tonnes.
The country has been facing challenges in making foreign payments, as banks’ nostro accounts have been depleted and the central bank is working towards stabilising them.
So far, $150 million has come through from the African Export Import Bank to fund the nostros out of the $545 million required by the banking sector.