Cooking oil prices squeeze consumers
Consumers have been left grappling with the continued cooking oil prices, forcing the Competition and Fair Trading Commission (CFTC) to launch an investigation to find out the cause.
Business News checks show that in recent weeks, prices of most cooking oil brands have increased by an average of K1 500, to about K7 500 for a two-litre bottle in most retail shops.
Blantyre-based Diana Banda, a resident of Chirimba Township, said in an interview yesterday that she bought a two-litre bottle of Kukoma Cooking Oil at K8 500, further constraining her budget.
Consumers Association of Malawi (Cama) data shows that in January 2024, a two-litre bottle of Mulawe Cooking Oil was selling at K5 695, Kukoma at K6 658 while Sunfoil was selling at K10 995.
Yesterday, a two-litre bottle of Mulawe Cooking Oil in Chipiku Plus was selling at K7 815, Kukoma at K9 995 while Sunfoil was at K14 000.
Cama executive director John Kapito, in an interview yesterday, observed that without being advised on any market movements, consumers are paying heavily for the commodity, whose justification for the hike is yet to be established.
He said: “It’s unfortunate that within a short period of time, we are experiencing high prices of cooking oil and with no justification for such increases.
“This is a commodity and market that seriously demands regulation as there are few players.”
A resident of Machinga District, Mwawi Simbenye said the price of cooking ol continues to rise on the market.
“This is inconveniencing us because this is happening at a time the cost of living continue to rise,” she said.
Malawi Oilseeds Producers and Processors Association were yet to respond to our questionnaire to justify the price rises.
However, CFTC spokesperson Innocent Helema yesterday said the commission started a price monitoring exercise last week to ascertain allegations of price increases of cooking oil.
He said: “Excessive pricing is one such violation provided for in the Competition and Fair Trading Act 2024 which can attract penalties. We will take to task anyone found to be violating the Competition and Fair Trading Act.
“Traders must be aware that the Act which became effective on July 1 2024, provides for stiffer penalties which can be up to 10 percent of annual turnover.”
This is the second time in three years that CFTC is probing cooking oil manufacturing firms on allegations of unwarranted pricing of the commodity.
In 2021, CFTC launched an investigation against Mount Meru Millers (Malawi), Sunseed Oil Limied, Moti Oils Malawi Limited and Agri–Value Chain Limited for increasing their products by between 30 percent to 42 percent.
However, it was later found that there were justifiable economic factors that contributed to the price increase, including rising prices of crude palm oil and soya bean on the global market, exchange rate volatility, freight costs, fuel and electricity pricesand re-introduction of 16.5 percent Value Added Tax (VAT) on imported crude oil.
Although the VAT was subsequently removed, prices remained elevated.
VAT was thereafter removed in 2022 but the prices of cooking oil remained elevated.
