Pwani Oil, the manufacturers of Fresh Fri cooking oil, Fry Mate and Salit has shut its plant due to the ongoing shortage of dollars to pay suppliers of raw matrials.
The management of the company confirmed the shortage of the currency making it hard for them to pay the suppliers of palm oil as they face competition from other manufacturers across the world.
Last week, Kenya Association of Manufacturers (KAM) highlighted the challenges they are facing to the Governor of the Central Bank of Kenya Patrick Njoroge that has forced of those trading it in the currency to hike its exchange rate.
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The Governor however maintained that the current supply of the Dollar in the market was sufficient standing at about $2 billion every month. The Governor noted that it was also enough for companies to pay importers.
According to Pwani Oil Commercial Director Rajul Malde, the importers require cash whenever they ship in order to send them the required documents to clear their goods at the port, something that has become impossible to do as they cannot receive the necessary documents even after shipping.
Indonesia currently stands as the largest producer of palm oil in the working accounting for 60% of all imports globally. Malaysia comes second in the business with other options being the use of soybean, sunflower and rapeseed oil.
Other players in the market have opted to get dollars in advance from their banks in order to meet future demands as they are not sure when the shortage will end.