Mbabane – Despite competing with cheap edible oil imports, pouring into the country from neighbouring South Africa, Eswatini Oil Mill Industries has continued to make further investment into the economy.
In the past three years, SOMI has invested over E80 million, according to information provided by National Agricultural Marketing Board (NAMBoard). According to NAMBoard Chief Executive Officer Siphephiso Dlamini, over the past three years, the miller has invested over E80 million into the plant and refinery to process all sunflower and soyabeans grown by local farmers.
In a bid to enable the industry to grow, Eswatini Government, through NAMBoard imposed a 24 percent levy on all imported edible oil and related products from South Africa.
However, a investigations by Independent News has uncovered that the 24 percent obtaining in Eswatini is among the lowest in the region. NAMBoard also corroborated this information, adding that in some other countries the edible oil levy is charged at 45 per cent.
NAMBoard is of the view that in as much as the oil levy might be viewed to be on the high side, it was better because imports were not completely shut down like in other countries. The CEO went on to state that there are other countries which protected the industry despite not producing it.
“By us, protecting the local edible oil industry, we have enabled the local processing company to invest with the confidence that the market is secured.
Over the past three years, The Miller has invested over E80 Million into the plant and refinery to process all sunflower and soyabeans grown by local farmers. Unlike other regional states where edible oil imports were completely shut down, Eswatini has allowed importation of edible oil. This however may not be sustained any longer as priority will now be shifted into the production of the raw material for the miller to grow his returns from the invest made already,” Dlamini said.
The CEO went on to say even though there has been great reluctance from the farming community, a lot of work is being done to lay the critical environment for the farmers to produce more sunflower and soya beans to supply this market.
“Over 1000 famers have been engaged in the process of producing for the miller. The majority have said they will only express interest once the genetically modified organisms (GMOs) are introduced,” he said, adding that this will double the yield immediately.
Dlamini said, based on this, and the consultations held with the stakeholders, all interviews are being lined out to kick in immediately after the enactment of the amendments to the Biosafety Act – which will permit producing using GMO seeds.
“The country will continue to monitor the trend in regards trading of edible oil in all regional and international countries in line with obtaining rules of trade,” he said.
Pertaining to the protection of the flour and wheat industry, the CEO said their actions have always been guided by their intentions to protect the industry. He went on to say not long ago, this industry was facing drastic challenges and special interventions were agreed to by the players in order to ensure its sustainability.
Asked if the increase in brown bread price was associated to wheat levy, Dlamini said: “The increase in brown bread prices is not necessarily linked to the cost of wheat levy, but rather to costs further down the value chain. Consumers, for the most part, do not buy bread directly from producers. The price consumers pay for bread is controlled by the retail markets. You will note that the price of brown bread has been consistent even where there has been a decrease in the wheat levy which tells you that levy is a not dominant determent to price variations.” The CEO disclosed that NAMBoard, as guided by industry players, reduced the levy being charged to its permissible minimum in terms of the schedule. “Wheat levy, today, is charged at three (3 percent) much against the permissible rate of 15 per cent. In some years, this was found to be insufficient to fully regulate this industry, when considering its complex nature and vigorous inspectorate services required ,” he said.
NAMBoard is guided and enabled by Act No. 13 of 1985.
In terms of this act, it is mandatory that NAMBoard maintains a record of traders who import scheduled agricultural products in the country. The Import and Export of scheduled agricultural products regulation notice No. 8 (Amendments) governs the local trade of agricultural produce to ensure that the country has enough food security, and local farmers have satisfactory market share for their produce.
In keeping with regional and international trade practices, Eswatini has initiated trade protection measures for diffrerent agricultural value products including wheat, maize, edible oil, vegetables and other fresh products.
This is to ensure that the local indutry is developed enough to play in the regional and international markets.