Prices of sugar have gone up by between 53 percent and 105 percent reaching up to K4, 000 a one-kilogram (kg) packet due to persistent shortage of the commodity on the market.
Times Business has learnt that in some parts of Rumphi and Mzimba a kilogram is fetching at K4, 000 while in most parts of the central region the same quantity is being sold at between K3, 600 and K3, 900.
In most parts of the southern region, retail shops are cashing in on the commodity selling it at between K3, 000 and K3, 400 per 1kg packet.
Before sugar supply shortages hit the market a 1kg packet was selling at K1, 995.
In an interview during Kulinji programme on Times Radio, Illovo Sugar Malawi Managing Director Lekani Katandula reiterated that the supply shortage is stemming from low production of sugarcane which they experienced last year.
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“Our production was affected by cyclone Freddy. For example, our year ends on August 31 and in the year ending August 2021, we produced 279,000 metric tonnes (mt) of sugar, in the following year we produced 229,000mt of sugar and by August 2023 the amount increases to 254,000mt despite that our capacity is 300,000mt.
“Secondly, we were affected by foreign exchange shortages that were prevalent in the past year. We need foreign exchange to import strategic commodities that aid our operations and production including factory spare parts. At some point we had to import our own fuel for our trucks. This forced us to sell more on the export market to generate forex to carter for our foreign liabilities,” Katandula said.
He added that low prices of sugar in Malawi fueled smuggling of the commodity into neighboring countries which exerted pressure on supply into the local market.
Commenting on the matter in the same programme, Consumers Association of Malawi (Cama) Executive Director John Kapito said the problem has been perpetuated by the fact that the sugar market is monopolized.
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“This is disturbing news because people are struggling to access sugar let alone afford it. This is a problem that has been there for a long time from the time of Sucoma Company. The major problem is that we have a monopoly where only one company dominates the market. It is important to protect monopolies to preserve foreign exchange among others but without competition this is always the result.
“We needed a plan B. We should have other companies produce the same product in the country because they could have helped in this situation. We needed the Competition and Fair-Trading Commission (CFTC) to work with speed to help Malawians who are struggling to access the commodity especially on the prices,” Kapito said.
CFTC Spokesperson Innocent Helema said they are conducting inspections and taking necessary action wherever possible.
“We have been conducting inspections and we have found that traders are taking advantage of sugar shortages where some are hoarding in anticipation of selling when prices have increased. We have also discovered that some are issuing receipts with a small figure, for example, K37, 000 for 20kg while the customer has paid K51, 000. Some traders have been forcing consumers to buy other commodities if they want to buy sugar also known as tying all of which are uncompetitive and unfair trading practices.
“We have opened cases against some traders and we are still investigating, once we conclude we will share with the nation the determination of the commission,” Helema said.
Meanwhile, the Ministry of Trade has given 20 traders licenses to import sugar from Zambia, Mozambique, Zimbabwe, Brazil and South Africa.
In a recent interview, Ministry spokesperson Patrick Botha told The Daily Times that the move would culminate in the stabilisation of sugar supply and prices in Malawi.
Botha disclosed that they would continue closing shops that are hoarding and over-pricing the commodity in the country.
“We are hopeful that the [problem of] sugar scarcity will be taken care of. You might have seen that there is sugar from other countries on the market; the whole idea is to ensure that supply stabilises,” Botha said.
This far, the Ministry of Trade has shut down seven shops in Lilongwe and Blantyre for allegedly hoarding sugar and, in some cases, selling it above the recommended price.
