Oilseeds Producers and Processors Association claims the economic challenges Malawi is facing have prevented prices of the commodity from falling despite prices of the commodity lowering on the international market.
This follows revelations that the price for soybean oil decreased by 3.2 percent to $1,548 per metric tonne (mt) in September 2022 from $1,599 per mt in the previous month.
In its September Market Intelligence Report, the Reserve Bank of Malawi (RBM) says the decline was a result of increased supply following favourable weather conditions, lifted export ban in Libya and high production levels in Iraq amid reduced demand induced by the resurgence of Covid and the associated lockdown in China.
It further highlights that in the third quarter of 2022, the average price for soybean oil declined to $1,560 per mt tonne from $1,887 per mt in the second quarter.
“Similarly, palm oil prices registered an 11.4 percent reduction to $909 per metric tonne in September, from $1,026 per mt in August 2022 on account of low global demand and the lifting of the ban on palm oil exports from Indonesia. On a quarterly basis, the average price of palm oil declined to $997 per metric tonne in the third quarter from $1,634 per metric tonne in the preceding quarter,” the report reads.
But in an interview, Oilseeds Producers and Processors Association president Peter Ngoma said there are a number of variables that are considered before effecting any changes in prices.
“What you must know is that there is always a time lag in these matters; so it’s not automatic that, once you have a global phenomenon, it would immediately reflect at local level. Economic trends do not work like that.
“But also you have to appreciate that we had devaluation of the local currency recently; so, the fact that prices of cooking oil have been stable on the local market means the manufacturers are absorbing the effects of that devaluation because ordinarily they were supposed to raise the prices in tandem with the devaluation, which never happened,” Ngoma said.
Spokesperson for the Ministry of Trade Mayeso Msokera referred us to the Competition and Fair Trading Commission (CFTC).
CFTC spokesperson Innocent Helema asked for more time before he could offer a comment on the same.