Dollar Shortage in KE

News & Politics
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COMPANIES
[SIZE=6]Pwani Oil closes plant, blames lack of dollars[/SIZE]
MONDAY JUNE 06 2022
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Pwani Oil commercial director Rajul Malde. FILE PHOTO | NMG
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By CONSTANT MUNDA
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Pwani Oil, the manufacturer of Freshfri, Salit and Fry Mate cooking oils, has temporarily shut down its oil plant due to shortage of raw materials which it blamed on difficulties accessing dollars to pay suppliers on time.
The consumer goods manufacturer said Friday its bankers were only processing half of the dollar orders it requires to pay the suppliers of crude palm oil imports from Malaysia amid stiff global competition.
“Getting sufficient amount of dollars required to support the factory in terms of getting sufficient raw materials is not happening. We are not even running the plant right now because of lack of raw materials [crude palm oil],” Pwani Oil Commercial Director Rajul Malde said.
“We are competing for the same oil with the rest of the world and, therefore, prices are high. Added to that, we can’t pay on time so we don’t get priority in supply.”
Central Bank of Kenya Governor Patrick Njoroge Tuesday last week dismissed concerns by the Kenya Association of Manufacturers (KAM) that persistent dollar shortages were triggering the emergence of a parallel exchange rate where lenders buy and sell well above the printed official rate.
ALSO READ: Global supply woes hit Kenyan consumer with costly imports
Dr Njoroge maintained the foreign exchange market transacts about $2 billion of the US currency every month, which he indicated was enough to meet demand from importers and companies for payments like dividends.
“At the moment, based on the inflows from banks, we are only able to source between $500,000 and $1 million a day against a requirement of $2- $2.5 million a day. So we are only getting half of what we need, sometimes even less than half,” Mr Malde said.
“Terms [of suppliers] are normally cash against documents. So when they ship a container out, they will send us copy of the documents and we need to pay to get those [original] documents to clear the cargo. Now that’s where the challenge is because if there isn’t enough dollars available, how do you pay and get the documents to clear?”
The situation, he said, has been compounded by stiff global competition for crude palm oil, which has exacerbated after Indonesia tightened its export rules to prioritise domestic needs.
Indonesia accounts for about a third of the global crude palm oil exports, which make up 60 percent of world’s edible vegetable oil shipments — others being soybean, sunflower and rapeseed oil.
That has left Malaysia as the main source of crude palm oil, the main raw material Pwani uses in manufacturing its cooking oil products like Fresh Fri and Salit.
“The situation can only improve if the dollar situation improves. And I am not seeing the dollar situation improving on its own without the central bank intervening and releasing some of the dollar reserves that they are holding to stablise the dollar demand in Kenya,” Mr Malde said.
ALSO READ: Cooking oil, soap shortage looms in palm export ban
“We are expecting one consignment [of palm oil] in the middle of this month and then after that there’s no more supply until the end of July. The one that is coming next month is dependent on dollar availability—whether we will be able to pay to release that cargo.”
Kenya’s foreign exchange reserves — which are largely tapped for debt payments and essential government imports such as medicines— last Thursday grew to $8.219 billion, or the equivalent of 4.89 months of import cover, from $8.177 billion a week earlier.
The official forex reserves, as published by the CBK, remain above Kenya’s statutory requirement of four months import cover and 4.5 months cover for the seven-nation East African Community bloc.
In April, KAM said banks had imposed caps on dollar purchases, making it difficult to obtain adequate forex to meet supplier obligations and injuring the ability to negotiate favourable prices in spot markets.
Two industrialists also told the Business Daily at the time they had been forced to seek dollars in advance as the persistent shortage threatened to put a strain on supplier relations.
ALSO READ: Households squeezed by new rise in food prices
“If you go to the market and deal with the specific banks according to the rules of the market, [then] that means the banks, yourselves and indeed the dealers are aligned about how the markets operate,” Dr Njoroge said.
“For you, as a customer, you don’t need to know the rules. Just go to the banks and present your information [on] what you are making the payments for, etcetera.”

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Shait

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Just devalue the damn shilling, no need to keep propping it up.

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Funny that we import palm oil from Indonesia and Malaysia when the plant is native to Africa. Grows like the coconut tree everywhere including inland west Africa.

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Wacha tupige kura tuanze campaign ya 2027.

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Saw a youtuber from Nigeria staying at some airbnb in nairobi saying that she can see some palm trees kwa compound having seeds and was wondering if she could press the seeds to make palm oil like they do in nigeria. So yes we can make palm oil even here in kenya, coz palm trees van grow in many places and not just at the coast.

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The US economy (and western countries) is doing poorly thus the shortage of dollars ie they are buying less from kenya and so fewer dollars in our pockets.

[MEDIA=twitter]1532058149062344705[/MEDIA]

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Bonoboste kwani uko off.

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Not in the Kenyan or east African mainland, only at the coast. West Africa is much warmer so it grows hadi inland.

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CBK and Kenyan companies are not willing to convert USD to KES. Kuna deni mzito inafaa kulipwa this year, na CBK inahitaji hizo dollars.

Also, most companies holding dollars don’t want to convert because the KES is about to be devalued in the next few weeks or months. Venye bei ya bidhaa zinapanda sio kawaida.

The KES is overvalued and the chickens have home to roost.

Ni kubaya, na CBK haitaki kuambia watu ukweli. But if you’re in a position to do it, open a foreign USD account and keep a significant amount of your savings in USD.

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What you mean by this. How should one go about it?

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Uhuru is waiting watu wapige kura then akina njoroge wafanye devaluation, watu wachuniswe sukuma for another 5 years.

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There are palm oil plantations in uganda. KARLO is also promoting palm oil in western kenya. Huko turkana palm trees grow wildly on the banks of the turkwel river. So you want to say the nigeria youtuber who has been making palm oil all her life “doesnt know palm oil seeds when she sees them in kileleshwa”? FYI palm trees grow in tropical regions and so can grow in many areas of subsaharan africa. And it is interesting that Indonesia and malaysia never had palm oil trees and imported the seeds from nigeria in 1970s and now they are the leading palm oil exporters while nigeria is still producing palm oil at a subsistence level.

Uganda’s oil palm sector yields results - The East African

Palm trees oil new path for farmers | Nation

Photo below is Washiali at his palm oil field in western kenya.

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Ni kubaya

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Hizo za kile ni miche, si hata zilikuwa Uhuru highway? They’re planted as tree stalks after seedlings zimepandwa coast or some other hotter place. They can only grow where its hot and wet. It’s like comparing coconuts in limuru na zile za coast. The ones in coast are taller and produce more fruit hence sell at a better price. Umeskia mnazi ikiuzwa Nairobi, yes they can grow but not very well.

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Ugandan farmers are uprooting coffee to grow palm oil. If uganda can do it we can also do it.

Quote:
[SIZE=6]Uganda’s oil palm sector yields results[/SIZE]

WEDNESDAY MAY 19 2021

James Lutaya is a successful Ugandan oil palm tree grower in Busanga village, in Kalangala district. He planted 55 acres of oil palm, 30 of which he divided between his nine children and his wife. From the proceeds of his 25 acres, he has been able to build a permanent house, buy a vehicle and take his children to school.

Previously a coffee grower, Lutaya says no crop yields better income than oil palm.

“Farmers who follow best practices are making good money out of this crop,” he says.

From his 25 acres, he harvests between three and five tonnes every 10 days, which brings in about $3,500 a month at the current price that Oil Palm Uganda Ltd (OPUL) is paying for raw palm seed.

Uganda has achieved substitution of nearly nine percent of its annual vegetable oil imports and lifted thousands of smallholder farmers out of poverty, a decade and half after launching oil palm growing in the island district of Kalangala. Some 1,850 smallholder growers are earning regular incomes from the sale of oil palm seed to OPUL, a joint venture between Kenya-based Bidco Oil and global palm oil behemoth Wilmar International, the government’s private sector partner.

After registering success in Kalangala, the government now wants to replicate the project in other poverty-stricken communities in the Lake Victoria Basin. According to Connie Magomu Masaba, co-ordinator of the National Oil Palm Project, there are plans to develop new plantations in Buvuma, where 900 hectares of a planned 5,000ha plantation has been planted since January. Other areas are Mayuge, greater Masaka and Sango Bay in southern Uganda.

“The major social impact of oil palm on communities is not the amount of money it gives farmers but the regularity of income. With that, one is able to plan and save, which is not possible with many other crops,” said Ms Masaba.

Expanding the crop area is an imperative because under its agreement with OPUL, the government was supposed to make 40,000ha available for planting oil palm trees. So far, less than half has been provided. OPUL’s Damanik said Uganda will need 100,000ha under oil palm if it is to fully substitute its palm oil imports at the current consumption rates. He adds that such production can only be achieved through oil palm because of its higher yield of oil compared with other crops, which would require a lot more land.

David Balilonda, the general manager of Kalangala Oil Palm Growers Trust (KOPGT), said progress has been slow because of activism by international NGOs who accused the project of decimating natural forests and dispossessing poor people of their land. Mr Balilonda dismissed the charge, saying 70 percent of the project was developed on marginal land such as grasslands and rocky outcrops, which have now become productive.

The marginal land was allocated to OPUL because it involved higher capital costs to develop, which could not be managed by local residents. The other 30 percent is on privately-owned land whose owners cut down trees to open land to oil palm plantations. Land acquisition was also slow because owners had to be compensated, he added.

First conceived in the 1970s, oil palm growing in Uganda only gained traction after OPUL came on board in 2003, under a $100 million project sponsored by the International Fund for Agricultural Development IFAD. Uganda consumes 550,000 tonnes of vegetable oil annually.

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We should also be growing palm oil plants in those coconut areas. Kenyan coast should be a leading producer and exporter of palm oil.

From KARLO website:

Introduction
Oil palm is an emerging crop grown for its edible oil and high yields compared to other oil crops. The oil is rich in vitamin A and E and can be used in the manufacture of soap, candles while leaves are used for thatching houses.
Agro-ecological requirements
• Warm climate in altitudes below1000m
• High temp (22- 27°C)
• Well distributed rainfall (1000 mm p.a) with no prolonged drought.
• Soils: loams, alluvial, peat soils which should be well drained and slightly acidic (pH 5.5)
• Sunshine of 5.5 hours per day.
The areas include Western Kenya sugar belt and the Coastal region.
Available varieties include: Hybrid Deli x Ghana, Bamenda x Avros for Western Kenya; and Hybrid Tanzania x Avros for Coastal region.
These hybrids are available at KARI Kakamega and Mtwapa respectively.

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The country is broke. Its 99% Jayden’s fault for borrowing recklessly without accountability. Hizi projects mnaona they will take double the initial payback period because half of the money was looted.

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The pandemic seriously affected the supply chain, hapa job vitu ndogo kama bolts sina stall works for days.

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Watu wakule chakula chemsha, weka chumvi acha kusumbua