Manufacturers protest as cartels import cooking oil

Cooking oil

Manufacturers protest as cartels import cooking oil.

Photo credit: Shutterstock

Cooking oil manufacturers are up in arms over plans by the government to import processed basic items to ease the cost of living.

The Kenya Association of Manufacturers (KAM) in a communique to its members on Friday said it would push for talks with the government regarding its plans to set up the Kenya National Trading Corporation (KNTC).

KNTC will be funded by Afreximbank and will enable the company to guarantee sufficient importation of key commodities including grains, processed edible oils and fertilizers.

The move is part of government efforts to reduce the cost of these commodities and lower the cost of living.

Cooking oil manufacturers have protested against the establishment of KNTC even as Trade and Investments Cabinet Secretary Moses Kuria promised to deal with “cartels” in the sector that have keep the prices of the commodity high.

The firms doing local processing of edible oils include Kapa Oil, Pwani Oil, Bidco Africa, Menengai Oil, Golden Africa, Edible Oil, Vipingo Industries and Gil Oil.

Others are Darfords Industries, United Millers, Salwa Kenya, Mvita Oils and another refinery at Athi River.

“Importing edible oil in containers and repackaging the same in 20-litre jerrycans does not meet the threshold of value addition and manufacturing,” said CS Kuria on his official Twitter handle.

“To these cartels and their hirelings, I have this to say: In the previous ministers you found your match. In me you will meet your Waterloo. Try me,” he fired.

This even as he said that the government wants to set up a vertically integrated edible oils industry locally that will see farmers at the Coast grow palm trees before palm oil is harvested and processed at the Dongo Kundu Special Economic Zone.

In a dispatch in November last year, Cabinet said KNTC will supplement other state initiatives by creating strategic reserves for staple and essential food items, vital farm inputs including fertilizer and any other goods necessary.

The move is aimed at ensuring the stability of prices of core goods consumed by Kenyans.

Oil manufacturers have expressed concerns that KNTC could spell doom for their business which is valued in excess of Sh130 billion.

They are seeking clarity on whether the government will engage local manufacturers to supply the goods to KNTC as well as if the State will reduce taxes on players to create a level playing field.

“Why doesn’t the government consider incentivising manufacturers through reduced taxation and lower cost of power to bring down the overall cost of production which will subsequently lead to the cost of finished goods to the level it wants?” they argued.

This comes at a time consumers are shouldering high cooking oil prices with the prices of the key commodity that is used in cooking, baking, cleaning, beauty and in the pharmaceutical industry having hit an all-time high in April last year due to global supply chain constraints.

The average price of cooking oil rose by 9.1 per cent from an average of Sh303.34 per litre in December 2021 to an average of Sh330.96 in December 2022, according to data from the Kenya National Bureau of Statistics (KNBS).

Should KNTC become a reality, the government expects prices of these key commodities to drop which will ease the high cost of living that has now risen at the fastest rate in five years.