Cooking oil prices strangle households, fast-food industry

NAMIBIANS are currently paying a king’s ransom for cooking oil.

This comes as the Russia-Ukraine war has dealt a triple blow to sunflower oil, palm oil and soybean oil supplies.

The pressure on the supply of sunflower oil from Ukraine has further squeezed export policy from Indonesia, affecting palm oil imports.

This has exacerbated crop loss concerns in South America, impacting the supply of soybean oil.

The ‘Namibia Consumer Price Bulletin ‘ for February indicates that the prices for oils and fats increased by 13,4% in February 2022, compared to 10,6% recorded in February 2021.

The increase was reflected in the price increases registered for cooking fats from 6,9% to 18,8%, cooking oil from 16,2% to 19,5%, and margarine and margarine spreads from -2,5% to 9,3%.

Consumers are paying up to N$100 for a two-litre bottle of cooking oil.

Globally, it was reported earlier this month that edible oil prices jumped with between 25% and 40% as the Ukraine war chokes supplies.

Local economist Salomo Hei says: “Cooking oil is central to the household food basket and is used in almost all meals consumed.

“Given that we find ourselves in an economic environment where disposable incomes have been eroded, this puts households under severe pressure.

“The conflict between Russia and Ukraine will be felt with the March inflation. So the increases will continue into the second quarter.”

He says consumers will continue to be under pressure, and that fuel prices are also on an upward trajectory.

“Households and consumers should focus on the essential goods and perhaps start with food self sufficiency,” Hei says.

‘sPENDING MORE, GAINING LESS ‘

Some local fast-food businesses say the current situation not only impacts them, but also their customers.

A popular fast-food outlet anonymously says: “If the cost price of this oil we usually buy increases, we will have to buy more, and this will add to t extra delivery cost which are already high. This is really affecting our business, because we are spending more and gaining less.”

Various restaurant and fast-food managers say cooking oil is an essential product, and that they would have to adapt their food prices according to the increases.

Many said they would have to look for various ways to increase customer demand to keep running.

Vendors in Windhoek’s central business district say the increase in cooking oil prices is putting a lot of added pressure on them.

Vendor Josefine Petrus says: “We will just try our best so we can continue servicing, because we depend on our businesses. We will increase the prices of our products, especially fat cakes, which were N$ 2,50 each. Now we will have to increase them with N$1.”

A vendor known as Aina only says: “There is nothing we can benefit from this, because if we increase the price of our products the customers will run away. Who will buy vetkoek for N$4,00?

“The rental cost of this market where we sell our products is already high. This will cause some of us to close down.”

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