Pwani oil has shut down operations, attributing it to the shortage of the dollars that has made it difficult to pay suppliers.
With this, the Prices of cooking oil is set to shoot to an all-time high this week.
“Getting sufficient amount of dollars required to support the factory in terms of getting sufficient raw materials is not happening,” Commercial Director Rajul Malde told Business Daily.
The shut down is temporary as the firm seeks to find solution.
“We are not even running the plant right now because of lack of raw materials," Malde said on Friday.
In Kenya, commodity prices have been increasing with the Russia-Ukraine war's impact being felt.
Cooking oil is among commodities whose prices have more than doubled in the last two months, with the latest development meaning the prices could only go higher, than drop.
During an interview with the Star, Golden Africa, dealers in cooking oil with brands such as Avena and Pika, said a shortage in the supply of sunflower has forced manufacturers to solely rely on crude palm oil for production of cooking oil and fats, of which Indonesia and Malaysia combined produce more than 90 per cent of global supplies.
Crude Palm Oil prices rose to $1,980 (Sh225,878 ) per metric tonne in the first week of March, from $1,400 tonnes (Sh159,712) before the war. They were at a low of $700 (Sh79,856 ) per tonne pre-Covid.
The ban now spells doom for households on only in Kenya but most markets which depend on imports of raw material for manufacturing and processing of cooking oil.
