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Forex shortage hit cooking oil industry

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By Justin Mkweu

Times has discovered that the country’s super markets are not having locally produced cooking oil just days after government announced 16.5 percent price reduction of the product.

Times spot-checks have revealed that in Blantyre,  shops such as Sana and Spar at Ginnery Corner do not have any cooking oil on the shelves while Chipiku and Shoprite are selling imported cooking oil only from South Africa.

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One of the country’s cooking oil manufacturers Capital Oil Refining Industries (Cori), who produce Kukoma and Bwitibwiti among other brands, has attributed the current shortage of cooking oil on the local market to shortage of foreign exchange for imports.

Cori Director Ameen Karim has told us today that they are operating at 30 percent because there is no forex to purchase raw materials on the international market.

He says apart from that, there is a 100% price hike on raw materials both internationally and locally.

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“We do not have foreign exchange in the country therefore my suppliers are not giving me the product. Apart from that crude oil prices have gone up because we used to import it at $1, 300 plus transport but today we importing it at $2, 000 plus transport and we used to buy soya beans at K450 per kilogram locally but now we are buying at K750 so how do you expect us to lower our prices?,” he questioned.

Foreign exchange scarcity has engulfed Malawi for the best part of last year and this year with import cover averaging 1.5 months against the recommended 3 months.

According to a monthly economic report for April from Bridgepath Capital as of March 31, the country’s gross official forex reserves decreased by 2.83 percent to $374.48 million while private sector forex reserves decreased by 3.86 percent to $391.49 million.

Minister of Finance Sosten Gwengwe said currently, the only hope for Malawi is an International Monitory Fund (IMF) facility.

Malawi remains a predominantly importing and consuming nation making it vulnerable to external shocks.

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