Things are continuing to go downhill for the Zimbabwean economy. Inflation is now back in the 3-figure zone as the Zimbabwean dollar’s value continues to plummet. It is so mind-blowing if you go back in time to 2019. There was one time then when the price of bread shot up by 60 percent to ZWL$5.60. So much has changed in just a couple of years when you look at now.
As of now, the wholesale price of bread has gone beyond US$1. This means bread is now retailing for as high as US$1.50. It sounds unbelievable that bread is now going for over ZWL$600. In theory, a small family would need over ZWL$20 000 just for bread alone in a month. I guess we are back to that time when bread is labelled a luxury.
Cooking oil is yet another basic commodity whose price has shot up. Right now 2 litres of cooking oil is retailing at around ZWL$2000. Cooking oil is also becoming difficult to come by as shortages intensify. The last time I was in an OK Supermarket they were limited to only buying at most 4 litres per customer. Let us look a bit more into why cooking oil is fast becoming scarce.
Suppliers Are Struggling To Finance Their Operations
Players in the cooking oil industry recently indicated that the weekly grants they get from the Reserve Bank of Zimbabwe (RBZ) are falling short. This was revealed by the President of the Oil Expressers Association of Zimbabwe, Busisa Moyo, who said:
“We have lobbied for an adjustment of the weekly amount as part of food security measures given the global supply dynamics so we are not closed out and unable to secure stocks later in the year post-harvest.”
Each player has been getting US$500 000 from the RBZ weekly. This is now inadequate due to the increases in prices of raw materials used in cooking oil production. The cost of raw materials surged from US$950 to US$2000 per tonne. That is a 110.5 percent increase and this has happened due to the Russian invasion of Ukraine. Yet despite all that, the RBZ allocations have remained mostly the same.
The Zimbabwean cooking oil industry needs about US$40 million to adequately bankroll cooking oil production monthly. As it currently stands, only US$16 million is being availed – only 40 percent of what is needed. That explains why cooking oil becoming hard to find in Zimbabwe lately. The higher cost of production and the scarcity are inevitably driving up the retail prices of cooking oil.
We Need To Move Away From Unhealthy Dependence On Imports
The root problem is that most of the raw materials used in cooking oil production in Zimbabwe are imported. That is why we end up in dire need of large amounts of US dollars. Most of the cooking oil produced in Zimbabwe is made from imported oil seeds. One wonders why we still heavily depend on imports when we can produce our own. The answer to all of this is scaling up the production of soya beans and sunflower in Zimbabwe.
Unfortunately, I think numerous local factors impede the production of these crops. A quick example is soya beans sales are now largely controlled by the Grain Marketing Board (GMB). This in many ways discourages people from farming those crops. After all, is said and done, we cannot run sustainably as a nation relying on imports. There is a need for looking inward to not become subject to scenarios like the one we are currently in.
The Zimbabwean dollar is getting weaker and weaker. The exchange rates are going nuts as ZWL$500 for US$1 is now in sight. Earlier this year it would have seemed unrealistic to make that projection, yet here we are today. What makes all of this sadder is that the best monetary and fiscal solutions are apparent (but ignored) and self-serving policies keep being enacted instead. People in Zimbabwe are going through a lot with many people struggling with mental health issues. Yesterday I saw a tweet of a young Zimbabwean lady aged 31 sayings she has never touched a payslip in her life. Why do you think we still largely live on imported raw materials for cooking oil production in Zimbabwe? Kindly share your thoughts by commenting below.