By Nelly Mtema in Dodoma
GOVERNMENT yesterday threatened to take harsh measures against edible oil traders inflating the price of the commodity contrary to indicative prices based on the world market trend.
Industry and Trade Minister Geoffrey Mwambe ordered the Fair Competition Commission (FCC) to monitor the current market trend, saying edible oil is now sufficient to meet the demand.
"We will not hesitate to revoke operators' licences for the distributors and wholesalers of the product, who will hike prices contrary the world market trend," he said.
"Anyone pricing above these regulated oil prices is doing so illegally. Price monitors are on the ground monitoring the situation. All those caught selling edible oil at prices not approved by the government or engaging in other untoward trading practices will have their licences revoked," Mr Mwambe warned in Dodoma.
However, he said that consumers should expect soaring prices as the international market prices are rising every now and then.
He said price elasticity of demand at the world market was pushing the commodity price to the ceiling, as importers are facing imported inflation.
"The scarcity is not there, what the consumers are facing is high price due to the increasing global supply of edible oil at the world market, which is being crippled due to the economic impact of Covid-19," he said.
However, he said despite the situation, distributors and wholesalers should not hike the price unnecessarily, insisting the price they set must be similar to the locally produced edible oil.
Mr Mwambe said the government has come up with special arrangement with the Tanzania Ports Authority (TPA) to fast track clearing of the vessels docking for offloading the commodity.
"These vessels should be given special attention to unload the cargo quickly, so that it can be supplied to the market," he said.
He said Tanzania consumes at least 30,000 tonnes of edible oil a month, while as of yesterday, a total of 40,000 tonnes have been offloaded this month ready to be supplied to the market to support edible oil produced locally.
Minister Mwambe told reporters that the government will continue to ensure that there is enough supply of edible oil in the country.
He said the government was in discussion with several stakeholders to set up more factories for producing edible oil locally, instead of depending on the imported products.
Consumers have to dig deeper into their pockets as the price of cooking oil has doubled since November last year, in which, the country has been facing scarcity of the commodity.
A survey conducted by this paper in some parts of Sumbawanga Town showed that the retail price of cooking oil has increased since December last year.
Currently, cooking oil of MO Safi and Korie trade at 100,000/- per 20 litre container from 50, 000/- to 60,000/-. Tanzania's annual demand for edible oil is estimated at 570,000 tonnes, while domestic production is only 205,000 tonnes annually.
Subsequently, there is a deficit of 300,000 tonnes, which is covered by imports. Equally, Tanzania imports assorted cooking oil brands from Malaysia and Singapore as well as from some neighbouring countries.
Following the trend, the minister said the government has embarked on a special drive to mobilise public to engage in edible oil seeds cultivation.
Currently, he said the country has a total of 752 edible oil factories out of which, 21 are major and medium scale and they produce between 25 and 40 per cent of their capacity, mainly due to short supply of raw materials.
Moreover, he said, the research institutes have been tasked to come up with the best seed breeds, so that the country could multiply produce quality product.
The nation is facing a large deficit in production of edible oil, forcing it to depend on imports to meet growing demand.
The major sources of edible oil in Tanzania are sunflower, palm, groundnuts, sesame, soya beans and cotton. Oilseeds are produced in almost all regions in the country.
Tanzania is Africa's second biggest sunflower seeds producer, accounting for 35 per cent of the continent's output after South Africa which accounts for 46 per cent.
Heavy rains and high demand for the locally processed cooking oil is believed to be the reason behind sharp rise of price and scarcity of product in the country.
Speaking in Dodoma recently, the Chairman of the Tanzania Sunflower Processors Association (TASUPA) Ringo Iringo said the two factors have pushed cooking oil prices to the ceiling not only in the country but also in the rest of East African countries.
"Most Tanzanians prefer using locally produced cooking oil than imported products, this has to the large extent pushed the price high," said Mr Iringo.
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