Local edible oil manufacturers are contending with shrinking market shares for the past six months, as imported edible oil products flood the market, offering lower prices and garnering higher consumer preference.

Ethiopian Edible Oil Manufacturing Industries Association, representing 232 members, has raised concerns about the factory gate prices of their products, which are notably higher than those of the imported alternatives. Board Chairman Mohammed Yusuf has disclosed plans to lobby for an increase in duties and taxes on imported alternatives as part of a strategy to boost the market share of local producers.

"Imported oil should be subjected to at least 20pc duties," he told Fortune.

He said local producers could meet half of the country's demand, even dealing with forex shortages. Mohammed contends that the current equal five percent duty on both crude oils used by manufacturers and finished edible oil from abroad unfairly favours importers.

Members plan to present their case to the Ministry of Finance in the coming weeks. They claim half of the members are operating at significantly less than 50pc of their capacity, facing challenges such as political instability, raw material shortages, and foreign currency constraints.

Industry insiders attribute the surge in imported oil to the Franco Valuta scheme, where importers source foreign currency from international accounts. Fully permitted in the past two years to combat inflation, the scheme allows importers with a minimum of 250,000 dollars in offshore accounts to import basic consumption goods by using their currency resources outside Ethiopia.

One government bid last year indicated demand for 49 million litres of edible oil through imports meant to be distributed by state-owned enterprises Ethiopian Trading Businesses Corporation and Ethiopian Industrial Inputs Development Enterprise. Another bid for the latter for the procurement of 20 million litres failed to attract any interested takers.

Mulay Woldu, tax policy director at the Ministry of Finance, suggests that the Ministry of Industry should conduct a study to address local manufacturers' woes.

The Ministry of Trade & Regional Integration has recently announced the purchase of 16.3 million litres of edible oil imported through the Franco Valuta scheme for distribution and state-owned enterprises, aiming to stabilise the market.

Meskerem Bahiru, head of the Consumer Protection Desk at the Ministry, said stabilising the market during the holiday season was one of the primary reasons for the large purchase. She said the local manufacturers cannot meet a tenth of the local demand despite their constant complaints over the allowance of Franco Valuta importers.

"The amount is decreasing," she told Fortune.

Top six edible manufacturers in Ethiopia were allowed to access 50 million dollars to procure inputs for their factories despite the figure being half the amount initially allocated.