This, coupled with a shortage of the commodity and a free fall of the Kenya shilling against the US dollar which is the major global trading currency is set to push a litre of cooking way above Sh400.
Crude palm oil prices have been on an upward trend; from $1,400 (Sh163,800) per tonne in January to $1,900 (Sh222,300) in March and now $2,100 ($245,700).
The prices of the main raw material in the manufacturing of cooking oil were averaging $700 (Sh81,200) per tonne pre-Covid.
Indonesia, the global leader in palm oil exports, was hit by the Covid-19 pandemic in the last quarter of 2020.
Containment measures put in place halted all farm and post-harvest operations, causing losses and hitches in global palm oil supplies.
Apart from grabbling with the high prices and shortage, local manufacturers are unable to raise enough dollars to pay for orders.
This has seen Pwani Oil which is one of the local major manufacturers of cooking oil temporary shut down.
Kapa Oil Refineries is also said to be operating below capacity, citing the dollar shortage and constraints in crude palm oil supplies.
Central Bank of Kenya governor Patrick Njoroge however maintains that the country has enough dollar reserves, with a monthly distribution of $2 billion which is way above what manufacturers needs.
Early this year, in a bid to protect its population against ta shortage of palm oil, Indonesia directed producers to set aside shipments for local buyers as it sought to reign in high domestic edible oil prices.
This further reduced the amount of crude palm oil available in the global market with the policy remaining in place to date.
Additionally, in April 2022, Indonesia introduced a total ban on refined palm oil exports, which was later lifted last month.
This ban has since been lifted, but the Kenya Association of Manufacturers say the impact shall not be overcome immediately.
Following the ban, the world sought alternative edible oils, especially soybean and sunflower oils. However, in 2019 - 2020, a two-year drought ravished South America and impoverished global soybean oil supplies.
“The major exporters, Brazil and Argentina, are yet to stabilise from the effects as they await new crop,” KAM chief executive Phyllis Wakiaga said.
The Russia-Ukraine conflict has also led to a rise in the price of fuel oils, which has a direct effect on freight charges as well as the cost of electricity, silo handling of liquid products and transport, the industries lobby group added.
Cooking oil (salad) prices have increased by almost 50 per cent in the last one year, Kenya National Bureau of Statistics (KNBS) data shows.
A litre, which was going for Sh252.03 in May last year sold at an average Sh370.71 in May this year.
A spot check by the Star yesterday showed some brands are currently retailing at up to Sh459 per litre.
Three litres of cooking oil is currently averaging Sh1,250 up from prices below Sh700.
Last month, cooking fat (500 grams) was retailing at an average Sh175.94 up from Sh121.70 same time last year.
Prices of all other fast-moving consumer goods that depend on oil such as bread, soap and margarine, have also also gone up.
“If left unchecked, the shortage of foreign currency, is set to lead to a shortage of these products, as local manufacturers will be unable to purchase sufficient raw materials and intermediate goods,” KAM said.
The rise in the price of various food basket items drove inflation to a two-year high of 7.1 per cent in May, up from 6.5 per cent in April and 5.6 per cent in March–KNBS.
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