If you saw 2 litres of cooking oil selling for US$5 last week and thought that was expensive you are in for a bit of shock. The price of cooking oil has now gone up in most shops has gone up to US$8 with some even selling cooking oil for the equivalent of US$9 per two-litre bottle. All indications are that this price can go as high as US$10 per two-litre bottle if the government does not intervene. A lot of supermarkets are now refusing to sell cooking oil and other basics such as mealie-meal in ZWL and demanding USD for at least those items while the customer is free to pay in ZWL/Swipe for other items.
It is not clear what is driving the price up but there is a lot of misinformation with some claiming that cooking oil is selling for US$8 per bottle in South Africa too. That is not true. The average price of a 2-litre bottle of cooking oil in South Africa has always been generally just over R35 that’s a mere US$2 per bottle. In fact, the price was as low as US$1.80 prior to the pandemic. This price has now gone up to R73 per two-litre bottle in popular supermarkets like Checkers and Makro. That translates to about $4.50 so the Zimbabwean price was bound to go up because about 40% of cooking oil sold in Zimbabwe is imported from South Africa. Generally, cross border traders who import from South Africa double their purchase prices (i.e. charge 100% mark up) so the price of U$9 was very predictable.
So normally we simply just blame the rate. This will not fly here. These increases are in USD and while ZWL inflation has been high USD inflation has generally been very low until recently. The war in Ukraine, drought and the usual government incompetence has brought us where we are today. The Zimbabwean government could have planned to alleviate some of the effects of the war in Ukraine but they did not scrap duty on fuel as that is a useful cash cow. The increase in fuel and other items has led to an all-around price increase. Add in the fact that cooking oil manufacturers are saying they don’t have the necessary raw materials to manufacture cooking oil we are in for some rough ride. We suspect there is no real single cause. The price surges are just the perfect storm.