Local manufacturing companies for cooking oil are now feeling the pinch of smuggled products resulting from serious influx of the commodity and just like a good number of rural areas, Blantyre City has not been spared.
A random survey conducted by Nyasa Times reveals that markets such as Limbe, Bangwe, Mbayani, Chilomoni, Chirimba and Ndirande townships in the city of Blantyre are selling smuggled cooking oil willy-nilly, claiming it is cheap.
Speaking on condition of anonymity, an agent in Ndirande 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 would rather order from Mozambique to make profits. If we buy the local products, we will be making losses. We used to buy from local companies but we stopped when companies hiked the wholesale price due to the introduction of Value Added Tax (VAT),” 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, there are no serious patrols on the borders 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 explained.
Meanwhile, some local companies have engaged the Ministry of Trade to intervene and remove VAT on cooking oil.
Operations In-Charge at Agri Value Chain Limited, Rajneesh Dabral, said the company is making losses since smuggled cooking oil flooded the local market. The company produces Pulora and Oleo brands of cooking oil.
“We have reached a point of no return. At first the issue of smuggling 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 we had between 2015 and 2017 when our sales dropped by 50%. You can check with other companies as well to get their side of the story. We have since engaged the Ministry of Trade to intervene,” lamented Dabral.
Government re-introduced 16.5 percent VAT on cooking oil last year following the amendment of the First Schedule to the VAT Act.