Local cooking oil manufacturing companies are feeling the pinch of smuggled products following the influx of the commodity not only in rural areas but in Blantyre City as well.
A random survey we conducted shows that some markets in Blantyre such as Limbe, Bangwe, Mbayani, Chirimba, Chilomoni and Ndirande townships are selling smuggled cooking oil because it is cheap.
An agent in Ndirande, who spoke on condition of anonymity, said they buy smuggled cooking oil from Mozambique to sustain their business.
“As it is we can’t order local cooking oil because it is expensive. We did rather order from Mozambique to make profits. If we buy the local products we will be making losses. We were buying from local companies but we stopped when the companies hiked the wholesale price due to the introduction of Value Added Tax,” he said.
Another trader in Limbe Market, who did not want to be mentioned, said the current economic condition was not conducive for business hence opting for smuggled cooking oil.
“It is better to take the risk. To be honest the patrons in the bordering countries are not serious so we take advantage of the situation to order our products. We have our connections in Mloza and Nkando [Mulanje district] where it is possible to smuggle different products including cooking oil,” he said.
Meanwhile, some local companies have engaged the Ministry of Trade to intervene and remove VAT on cooking oil.
Agri Value Chain Limited Operations-in-charge Rajneesh Dabral, whose company produces Purola and Oleo, said they are making loses after smuggled cooking oil flooded the local market.
“We have reached a point of no return. At first the smuggling thing was only in Ntcheu and Mulanje but now it is all over. Imagine township markets in Blantyre having a lot of smuggled cooking oil. It is like the situation which we had between 2015 and 2017. Our sales have dropped by 50%. You can check with other companies as well to get their side. We have since engaged the Ministry of Trade to intervene,” he said.
Government last year re-introduced 16.5 percent VAT on cooking oil following the amendment of the First Schedule to the VAT Act.