Expect Oil Shortage In Kenya, Manufacturers Warn

Apart from the rising costs of cooking oil, the manufacturers now warn that there is a possibility the commodity will not be accessed due to a reduced supply of raw materials.

This comes shortly after Indonesia, the world’s biggest producer of palm oil, threatened to ban palm oil export from Thursday, 28^th April 2022.

Cooking oil prices have already climbed higher by more than 50 percent in the last few months. A shortage would mean rationing, resulting in much higher prices for the commodity.

Manufacturers of Edible vegetable oil products, such as fresh Fri and Elianto, and Pwani Oil, stated that the ban would have a significant hurt on the commodity market due caused by the pressure to increase prices further to avoid making losses. The ripple effect will be felt in the commoner’s pocket.

Alternative palm oil sources for Kenya, such as Malawi, have also been experiencing labor shortages, thus reducing supply. If the ban is affected, then Kenya is set to face it rough.

According to a recent report, palm oil makes up about 60 percent of global edible vegetable oil exports, and Indonesia accounts for a third of the exports.

And now that the cost of importing palm oil into the country jumped by about 45 percent between February- and March 2022, the manufacturers have raised retail prices by almost 35 percent on average.

“We have tried to minimize the cost to consumers by being creative and innovative with other parts of the supply chain, but we have had no choice but to increase the prices.

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“We have managed to reduce costs in other places in the supply chain by 10 percent. But now we are also getting problems from scarcity of dollars in the market, which is increasing the exchange rate, and it may not be possible to keep these costs down,” said Pwani Oil Commercial Director Rajul Malde.

This comes only a few months after Ukraine, which accounts for 76 percent of global sunflower oil exports, cut its supplies after its invasion by Russia in late February.

It looks like cooking oil which is also bought in bulk for industrial use in detergents and foodstuffs such as bread, will continue to be the Kenyan gold after all.

The prices of cooking oil have jumped by almost 33 percent Since March 2022 in Kenya, making it the country’s most expensive essential commodity.

A liter of Fresh Fri and Avena cooking oil in major shopping outlets now sells at 350 shillings and 385 shillings, respectively. A 5 liter and 10 liters of the same commodities are going for 1700 shillings and 3400 shillings, respectively.