Oil producers say the future of soya farming lies in Government taking a firm stance on banning soya imports by speculators
Business Reporter
EDIBLE oils manufacturing companies have warned that the continued indiscriminate issuance of import permits for soya beans could lead to a collapse of trade in locally produced soya crop.The manufacturing firms, which also hold Government issued permits to import the raw material in the event of deficit in local supplies, said most of the imported soya was coming from Zambia. Imported soya, the companies said, has led to price distortions on the local market for soya beans at a time the situation in the cooking oil industry had returned to normal, aided by the good rains, which temporarily ensured normalcy on raw material supply.
The oil expressers claimed that while local farmers were selling their crop to them, the Ministry of Agriculture, Mechanisation and Irrigation Development kept issuing import permits to speculative traders.
“The major issue affecting oil expressors at the moment is the importation of soya bean seed and soya meal by speculative dealers at a time when local farmers are selling in their soya crop.
“When the soya season started farmers were selling at $500 per tonne, with the oil expressers willing to onward sell the soya meal at import parity prices by blending local beans with imported beans, which were coming in at $360 per tonne from Zambia.
However, some traders have connived with the Ministry of Agriculture to get import permits to bring in soya beans for speculative purposes which they sell locally at the higher prices,” Oil Expressers Association president and Surface Investments chief executive officer Sylvester Mangani said yesterday.
He said the local cooking oil manufacturers had agreed with the Ministry of Agriculture, Mechanisation and Irrigation Development that they would buy all the local soya beans at $500 per tonne, but the ministry had continued to issue import permits.
“However, the Ministry of (Agriculture) continues to issue import permits to speculative traders to import the soya beans from Zambia thereby collapsing the local market for soya beans,” Mr Mangani said.
He added that once the imported the soya beans have landed it was impossible to differentiate between foreign and local soya crop.
Mr Mangani said local farmers deliver about 20 000 tonnes, which falls short of the 120 000 tonnes required to meet demands for soya bean meal used by local manufacturers of stock feed. He said the deal between Oil Expressors and the Ministry of Agriculture, was to restrict the importation of soya beans to the local processors so that soya meal could be manufactured locally.
Mr Mangani said the net effect of indiscriminately issuing soya beans and meal permits was that local farmers could sell their soya crop at the local price of $500 per tonne as the price was forced to drop to $400 per tonne to compete with imported beans brought in by traders taking advantage of the arbitrage opportunity.
He also said the issuance of import permits wasted foreign currency while capacity utilisation continue to decline as their companies could not compete with imports if they use local soya only.
“Our request to Government has been for them to stop imports of soya meal and allow only seed processors to import the required soya bean quota as agreed to meet local meal requirements.
He said the future of soya bean farming lies in Government taking a firm stance on banning soya bean imports by speculators.