By Innocent Mphongolo:
Illovo Sugar Malawi plc has reported that an abnormal surge in domestic sugar demand has severely impacted its export capacity, with overseas sales plummeting to just 6 percent of total production in 2025, down from 46 percent in 2020.
The company has attributed the drop to a 53 percent spike in local consumption, raising concerns over smuggling and its effect on Malawi’s foreign exchange reserves.
Interim Managing Director Kondwani Msimuko revealed that Malawi’s sugar demand has risen “abnormally, beyond domestic requirements,” forcing the company to prioritise local markets.
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Daily sales now average 900 tonnes, a volume that should theoretically meet domestic needs. “We should be asking ourselves: Where is all this sugar going?” Msimuko said, hinting at possible smuggling.
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“Once we answer that, we can balance local and international markets,” he said.
The export crash poses a significant threat to Malawi’s economy, as sugar is one of the country’s top foreign exchange earners.
Msimuko cited the demand surge as a primary factor but acknowledged other unspecified challenges contributing to the downturn.
To address the crisis, Illovo is taking urgent steps, including investigating the root cause of the demand spike, boosting productivity to meet both local and export needs, and collaborating with the government to tighten border controls and curb smuggling.
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Msimuko expressed optimism that exports could rebound if smuggling is managed and production scales up.
“We’re working to ensure borders are properly managed,” he said.
This is coming at a time economists and various stakeholders have been warning that prolonged export declines could further strain Malawi’s fragile economic position, calling for stricter oversight of investments that will focus on production and Exports.
Illovo’s ability to restore its export capacity will be critical for Malawi’s economy, which relies heavily on agriculture to stabilise its dwindling forex reserves which have been consistently below the internationally recommended rate of three months of import cover.
