Economic analyst says flooding market with imported cooking oil might not automatically trigger price reduction

An economic analyst says government decision to flood the market with imported cooking oil might not automatically trigger drastic reduction of the commodity.

Officials from the ministry of Trade and Industry said recently in a statement that the government will flood the market with imported cooking oil if manufacturers do not bring down the prices after April 1, 2022 when the 16.5 per cent VAT would be removed.

But Dr Betchani Tchereni of the University of Malawi and Applied Sciences (MUBAS) said there other factors such as scarcity of forex and continuous weakening of the local currency that could also affect prices of the imported cooking oil.

Spokesperson in the Ministry of  Trade , Mayeso Msokera says they are currently observing the cooking oil manufacturers in the country after removing the 16.5 percent value added tax on the commodity, and failure to reduce prices come April 1, government will go ahead to allow  importation of the commodity by 1st April.

Importation of cooking oil already started, for example in Lilongwe cooking oil from Mitundu-Mozambique channel is selling at lower prices than locally manufactured ones. And on the social media, South Africa manufactured cooking oil is selling like hot bread.