•Kenya Association of Manufacturers (KAM) has urged Treasury to suspend or remove levies charged by Agriculture and Food Authority.
•They were introduced through the Crops (Nuts and Oil Crops) Regulations, 2020.
Image: /MARTIN MWITA
The government should consider suspending a number of levies to help cut cooking oil prices.
Kenya Association of Manufacturers (KAM) has urged Treasury to suspend or remove levies charged by Agriculture and Food Authority (AFA) introduced through the Crops (Nuts and Oil Crops) Regulations, 2020.
It also wants the government to suspend the three per cent Railway Development Levy (RDL) and Import Declaration Fee (IDF) charged on raw materials used to manufacture edible oils.
“This will have an immediate impact on the finished edible oil products for the benefit of the consumer, thus lowering the cost of living, “KAM acting chief executive Tobias Alando told the Star.
He was responding to the Star’s inquiry on why cooking oil prices have not dropped, despite a global reduction in crude palm oil prices.
In June, the Consumer Federation of Kenya (Cofek) accused manufacturers and retailers of exploiting consumers on commodity prices.
Cofek claimed retailers were unilaterally increasing prices of basic goods, taking advantage of the elections, inflation and the Russian-Ukraine war.
Most affected, according to Cofek Secretary general Stephen Mutoro were Fast Moving Consumer Goods (FMCGs), like maize and wheat flour, sugar, cooking oil and tissue paper.
Cofek cited abuse of buyer power between manufacturers and supermarkets and called on the Competition Authority of Kenya (CAK) to restore order in the retail sector.
Both KAM and the Retail Traders Association of Kenya (RETRAK) however denied the claims.
RETRAK chief executive Wambui Mbarire said the retail sector does not control manufacturing prices.
"Prices are determined by suppliers not supermarkets," she told the Star.
The weak shilling however continues to affect import of Crude Palm Oil, according to manufacturers.
The benchmark futures for crude palm oil have fallen by about 47.5 per cent, from $1980 (Sh236,808) per metric tonne in March this year, to $1,040 (Sh124,384) last week.
This is on the account of continued rising Indonesian domestic and export capacities.
Crude palm prices hit a peak of $2,100 (Sh251,160 ) per metric tonne in June due to a global shortage.
This was after the Covid-19 pandemic heavily affected Indonesia and Malaysia, the two biggest producers of crude palm oil, crippling harvesting and milling activities.
The Russia-Ukraine war also adversely impacted exporters, with shipping lines increasing freight charges in response to the rising cost of fuel and logistics disruptions.
Nevertheless, manufacturers have adjusted prices offered to retailers and wholesalers downwards.
According to KAM, the price of a 20 litre container of cooking oil has dropped to between Sh4,500 and Sh5,000, from Sh5,600–Sh6,000 two months ago.
A spot check by the Star yesterday however showed some retailers are selling the same at prices of up to ShSh7,000.
A five litre of cooking oil is averaging Sh1,700, three litres at Sh1,200 while a litre is going for an average Sh400.