Cooking Oil Prices Set to Rise Further Over Looming Dollar Shortage

Cooking oil prices could rise further in the coming days amidst the biting dollar shortage which coupled with limited exports of palm oil from Indonesia, the world’s biggest producer, is likely to worsen the situation

There has been a 28.6 per cent increase in cooking oil prices since February, with a litre now retailing at Sh445.

While some manufacturers have scaled-down production, no edible oil imports are expected in Kenya between now and June 20. Cooking oil production companies say the dollar crisis, the war in Ukraine and the ban on exports by Indonesia have hampered the importation of raw materials used in the production of cooking oil.

The Kenya Association of Manufacturers (KAM) edible oils sub-sector said it imports raw materials worth Sh11 billion monthly.

“The scarcity of foreign currency has hampered local manufacturing. Our factories need the currency to import raw materials. The edible oils sub-sector has been heavily impacted. We import thousands of metric tonnes of crude oil each month. It, therefore, needs more than $100 million every month,” Mr Abdulghani Alwojih, the sub-sector chairman.

Ukraine is Kenya’s top supplier of sunflower oil, while the drought in South America has increased the prices of soybean oil, which is usually an affordable alternative.

According to the Mombasa port schedule, of the 14 vessels expected to dock between June 6 and 20, none will be shipping in palm and vegetable oil. Fourteen will be carrying containerised cargo: Cars (six), clinker (two), bagged rice (one) bulk wheat (one), fertiliser (two) and steel products (two).

Kenya Ports Authority records show that palm oil and vegetable oil was last shipped in on May 19, via MV Maritime Venessa and MV Navigating 8 Guard.

A litre of cooking oil in the country has moved from Sh346 in February, Sh430 in March, Sh408 in April to Sh455 in June. This has come up from Sh303 per litre last year and Sh206 in 2020, meaning the price has more than doubled over the past two years (a 116 per cent increase).

Read also; Pwani Oil in Temporary Shutdown Due to Dollar Shortage.

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