Local sunflower farmer selling 2.5 Ltrs cooking oil at under K100

The exorbitant retail prices for cooking oil have raised concerns after the commodity recorded over 80% price increase between 2020 and 2021. So many reasons have been proffered to justify this price jump but the Zambian Business Times – ZBT can reveal that local production and processing seems to be winning the debate.

After a Lumezi – Eastern Province based local cooking oil processor told ZBT that they were producing and retailing cooking oil at half the price obtaining in Chain stores, another Mazabuka – Southern Province based local farmer and processor has revealed that they are also able to produce cooking oil and sell it at under K100 for a 2.5 litters container.

A farmer based in Mazabuka has encouraged local farmers to venture into value addition and start looking at farming as a business, which should be the vision for the country and region as it is the only way to grow from small-scale to commercial farming.

Nkolola Halwindi, Chenko farm Director who grows sunflower that she later processes into cooking oil and makes animal feed as a by-product is currently producing about 220 litres of cold pressed cooking oil per day, has told the Zambian Business Times – ZBT that vegetable oil prices can be lowered by tangible local production.

Halwindi said cooking oil is one of the easiest products to produce as a small-scale farmer adding that farmers should grow their own sunflower, as it is cheaper and can help other farmers around by providing outgrower schemes.

She said 33-37 kgs of sunflower can produce 10-12 litres of cooking oil, noting that that is also dependent on the variety of sunflower and farmers should plant specific sunflower varieties bearing in mind whether they want to produce more cooking oil or sunflower cake.

She noted that the advantage of value addition when it comes to sunflower is getting the oil out of the crop as well as the sunflower cake which is used for animal feed adding that she uses half of the by-product to feed the animals on the farm and sells half at K205 per kg at wholesale price.

She further said the cooking oil, which is selling for K39 per litre (about K97 for a 2.5 Litter container) , realises 70%-100% profit and is mostly sold to people that buy in bulk at wholesale price for resale purposes with a few refining it and most of them repackaging it into smaller bottles and others selling it to fast food businesses and restaurants.

She noted that deodorising cooking oil is expensive for small-scale farmers and the local market does not value virgin cold pressed oil with the original smell but instead prefer refined cooking oil, which requires an extra expense for the producer who would in turn charge a much higher price for the cooking oil.

“People will order virgin cold pressed oil thinking they are getting refined oil, they just think to say this is cheap not realizing that they are getting cold pressed oil which comes in its original state. Those who are health conscience would buy the cold pressed oil at a premium so it’s just a matter of helping our local customers understand which one is a healthier product”, she said.

She said it is possible to sell the customers the refined product at a higher price, which also means they would lose the health benefits of the cold pressed cooking oil.

Halwindi said labeling the product is expensive, the certification process is also a challenge especially for local farmers who are not knowledgeable adding that getting certification from the Zambia Bureau of Standards  (ZABS) is a long process which one cannot wait for before putting their products on the market.

Speaking to the Zambian Business Times-ZBT, Halwindi mentioned that investments are required when it comes to value addition, as one needs to acquire machinery and other necessities.

She said some of the challenges that local and emerging farmers face is the high cost of funding for expansion of projects or value addition and the high interest rates on loans is prohibitive while the limited access to finances is equally a concern.

She noted that most Small and Medium Enterprises (SMEs) have big plans, which need support in terms of access to markets, collateral for funding as well as relevant data and information for their target markets.

She has challenged fellow local farmers to remain focused, resilient and invest in knowledge around consumer preferences as well as global trends in value addition link in agriculture adding that farming should be considered a business.

She has appealed to government to support SMEs and local farmers to fast track mechanization of their agribusinesses. They should look at even direct machinery support as this would help the country produce affordable food for the people.

Halwindi said being linked to the market is important and when the cooking oil is labelled and certified possibly before the end of this year, Chenko farm plans to have its cooking oil brand on the shelves of major supermarkets in major towns across the country by next year.

She said long-term plans include tapping into the export market and exporting to neighbouring countries such as Namibia, which is a large consumer of some Zambian products, Angola, Congo DR, Malawi and Zimbabwe.

The exorbitant retail prices for cooking oil

Buya Bamba controls Potato market by limiting access to seed

Zambia’s leading potato producer, Buya Bamba has been accused of controlling the Zambian Potato market by limiting access to their outgrower program and its seed to a few select large scale farmers at the expense of local small scale farmers who can enable the country meet its national potato demand.

Zambia Seed Company Limited (ZAMSEED) Company Director of Research Dr. Bhola Verma has revealed that Buya Bamba Limited has continued to maintain a monopoly on potatoes by only providing seed potatoes to farmers who are willing to sell their produce back to the company.

Verma said the company normally provides seed potatoes to large-scale farmers who it later buys all the potatoes from in order to keep having control of the market, which is unfortunate for small-scale farmers, as they are not supported.

Verma further said the discriminatory approach that the company uses to maintain the monopoly, unfortunately, neglects small-scale local farmers who would want to venture into growing potatoes.

Speaking in an exclusive interview with the Zambian Business Times – ZBT, Verma said ZAMSEED used to produce seed potatoes about five years ago but the company could not break even due to lack of adequate facilities.

When Zamseed used to produce potato seeds, two thirds of the seed potatoes that were produced was sold but the rest were spoilt and wasted, a situation the company could not handle and therefore decided to let more specialized companies handle the production.

He further said the biggest challenge that the company had was not having enough cold rooms because producing seed potatoes requires proper infrastructure and unfortunately, the situation with storage facilities has not changed until now.

He noted that the company has a farm, appropriate structures and other basic requirements but unfortunately, cold rooms are the biggest challenge adding that the rest can easily be acquired.

He also said people with the right facilities and expertise can produce seed potatoes as it is not a difficult thing to do, but requires investment in cold rooms and other key requirements.

Verma mentioned that producing seed potatoes is a specialized craft and it is very important to have proper storage facilities if one is to venture into it.

Zambia has recently experienced increase in prices of commodities that include Potatoes. This has led to consumers questioning why even locally produced goods and Agro produce has also followed suits with prices increasing by over 50% within a year.

An analysis of the potatoes market has revealed that there are limited local producers on the market leading to monopolistic tendencies by the few large scale producers. Local farmers who make the largest numbers and account for the highest production volumes are not actively engaged in the current Potato out-grower programs.

Zambia’s leading potato producer, Buya Bamba has

Allowing export of un-processed soya beans is an economic setback

The Small Scale Farmers Development Agency-SAFADA says lifting the ban on the exportation of raw soya beans is an economic draw back, which will delay the development of value addition in the agriculture sector.

SAFADA Executive Director Boyd Moobwe said government should instead facilitate industrialization so that whatever is produced in the country can be processed and exported as high value finished products.

Moobwe said the kwacha has continued to depreciate and lose value against the dollar because the country is not into production adding that if farmers are assisted, Zambia can be a food basket for the whole Africa.

Speaking in an interview with the Zambian Business Times-ZBT, Moobwe said soya beans can be processed into soya chunks, cooking oil and livestock feed which can be exported at day double the value or more and Zambia should be in a position to produce and process so that it can export finished products.

He said there is need to produce and export finished products in order to revamp the economy and gain extra foreign exchange but that is not happening because the production level remains low due to low export earnings from export of raw or unprocessed products.

He added that being unable to increase production will result in Zambia being a dumping ground for goods from outside as the country is not able to maintain its food security. Moreover, you find that export permits are now being given even for products that are in deficit in the country.

“Some of the products that are on the Zambian market are finished products from different countries, why can’t we do the same, I know we are exporting some products but the quantity is not at an optimum level”, he said.

He said economists, agriculturalists and other technocrats should advise government on what should be done so that the economy can improve and put in place proper measures that can boost agriculture in terms of production and exports.

“Technocrats should look into this issue, otherwise we will be complaining all the time that our economy is bad and yet we are misfiring somehow. There’s peace in the country and we are able to venture into different economic activities, we don’t run around because of war and so on but there is nothing much which is put in place to help the farmers with value addition”, he said.

He said lifting the ban on the exportation of raw and unprocessed soya beans will benefit the farmers as they will be offered a better price but this will negatively affect the economy in terms of production and value addition in the long run.

The Small Scale Farmers Development Agency-SAFADA says

Bread prices escalate despite wheat production increase

Bread prices on the market have continued to go up despite Zambia recording about 7% increase in wheat production this year. Consumers have complained of continued increase in essential commodity prices, with some price increases going over and above the Kwacha depreciation rate.

One would normally expect prices of bread to come down or remain stable when wheat production increases, the situation in Zambia is distorted owing to the rapid Kwacha depreciation and uncoordinated policies were the ministry of Agriculture and Livestock has continued to issue export permits even for produce that are in short supply within the country.

According to information obtained from the Zambia Statists Agency (ZamStats) by the Zambian Business Times – ZBT, Zambia’s wheat production has increased from 191,620 metric tonnes in 2020 to 205,882 metric tonnes in 2021.

Millers Association of Zambia – MAZ President Andrew Chintala in 2020 disclosed to ZBT that Zambia has a wheat deficit of around 120,000 metric tonnes, normally supplemented by imports. However, cutting the deficit has been a challenge as local farmers have struggled to undertake efficient wheat cultivation.

And Zambia Seed Company Limited (Zamseed) Director of Research Dr. Bhola Verma says the 7% increase in wheat production is phenomenal, as national yields do not change very much on annual basis.

Verma said on a countrywide basis, changes of more than 5% in wheat production do not usually occur adding that this change can be because of the favourable season experienced last year as unfavourable weather conditions also contributed to fluctuations in production in the previous years.

Speaking in an interview with the Zambian Business Times – ZBT, Verma said the 7% increase is an indication that with more concerted efforts, the country is capable of increasing its wheat production in the coming years.

He said the increase can also be attributed to an increased planted area and application of fertiliser among other important factors noting that farmers may sometimes plant bigger areas due to better prices offered for products.

Verma said the good rainfall that was experienced recharged water tables and dams across the country which can result in increased wheat production as availability of water can be a challenge sometimes  due to low rainfall which leads to water tables not been recharged and this may result in low production because some farmers end up reducing the planting area.

He said the increase in production can be largely attributed to the good rainfall that was experienced which led to water tables been recharged and filling up of dams. Wheat is a winter crop that relies on irrigation and adequate water availability.

He mentioned that Zamseed developed two wheat varieties namely harrier and falcon, and farmers should consider using these seeds as they can contribute to increasing production due to their high quality.

Bread prices on the market have continued

Cooking oil processors u-turn – now want to import refined cooking oil

Crushers and Edible Oil Refiners Association – CEDORA members who had earlier stated that imported refined cooking oil would still land at a higher price than their final cooking oil products have u-turned and requested government to grant them import permits for refined cooking oil.

This follows the recorded drop in cooking oil prices following the government issuing of an import quota to traders to bring in refined cooking oil to plug up the supply gap that had seen retail prices continue to increase out of the reach of most working class Zambians.

An impeccable source has disclosed to the Zambian Business Times – ZBT that government has rejected a request by local cooking oil manufacturers to start importing packed refined cooking oil, after the prices of cooking oil dropped.

The source said the Crushers and Edible Oil Refiners Association (CEDORA) has asked government to allow them to import packed refined cooking oil as opposed to the current scenario where they import crude palm oil which they then refine locally.

The source said it is surprising that CEDORA wants to start importing refined cooking oil, as they were not for the idea of allowing the importation of refined cooking oil saying that they could beat the price of imported cooking oil.

The source said it is not clear why the association wants to start importing refined cooking oil as government has suspended Value Added Tax (VAT) on the importation of crude palm oil which should assist with the cost of importing the oil.

When contacted for a comment, CEDORA Director Aubrey Chibumba said he could not comment on the matter. Chibumba in the past disclosed to ZBT that local oil processing has contributed to the increase in soya beans cultivation from less than 100,000 metric tonnes per year in 2014 to the current production of over 410,000 metric tonnes this year.

Chibumba had told ZBT that 360,000 metric tonnes of soya beans was produced in 2016 but the poor prices resulted in over 100,000 local farmers exiting the cultivation of soya beans and the national cultivation dropped to 240,000 tons per year after that price crush.

He mentioned that this year’s crop from local farmers is expected to exceed the crop from commercial farmers for the first time, which has been made possible because small-scale farmers have noticed that crushers are paying good prices for soya beans.

Chibumba said soya beans is currently trading between K9 and K12 per Kg compared to the last season when the price closed at K5/Kg adding that this is the momentum that is needed to sustain the good soya beans prices currently prevailing on the market.

He said the association has proposed solutions that must be implemented before the 2021/2022 cultivation season which include local farmers having access to the best prices and will work with the Grain Traders, ZNFU, aggregators and other stakeholders to ensure that local farmers are not paid below cost prices.

Other proposed solutions include structured exports of oil seeds and market access support among other factors.

Chibumba stated that the country has huge opportunities within the agricultural space such as the oil seed cultivation and processing, a sector, which has over 800,000 tons of installed soya bean crushing capacity.

He further revealed that there are two new crushing plants under construction, which are likely to be operational by the end of the year.

Crushers and Edible Oil Refiners Association -