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Sugar sales drop by 70%

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Rampant smuggling of sugar in to the country has forced sugar sales to drop by nearly 70 percent in January 2016 as compared to the volumes sold during the same month last year.

Latest statistics from the Reserve Bank of Malawi (RBM) shows that while sugar sales amounted to 10.3 million kilogrammes in January 2015, this year, Malawi only managed to sale 3.1 million kilogrammes, representing a decline of 69.9 percent.

And the report quotes Illovo as saying that the drop results from increased smuggling of sugar from Mozambique, Tanzania and Zambia.

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“The significant slump in sugar sales volumes resulted in a 63 percent fall in sugar sales earnings to K1.5 billion compared to K4.2 billion realised in January 2015,” reads part of the statement from RBM.

Despite the fall in revenue, sugar exports increased to 15.5 million kilogrammes in January 2016.

Illovo Sugar Malawi earlier confirmed sales of its sugar on the local market went down by 40 percent as a result of increased smuggling of the commodity into the country.

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This comes at a time the company is reeling from lost foreign sales revenue as a result of removal of preferential sugar exports for Malawi into the European Union.

In an earlier interview, Illovo Public Relations Officer, Ireen Phalula said there is evidence that huge quantities of sugar are entering Malawi with import licences from Mozambican, Tanzanian and Zambia.

She said the influx of the smuggled sugars has resulted into a drop in sugar sales for Illovo.

“The net effect of this for Illovo as a company, amongst other, is that sales in the current year are down by 40 percent compared to the same time last year,” said Phalula.

Phalula further said most of the sugar being smuggled into the country enters the country without Vitamin A fortification, which is a legal requirement for sugar on the Malawi market.

She said Malawi is also adversely affected as smuggled sugar is not subject to duty or VAT and therefore deprives the country of much needed revenue at a time the Malawi government is in desperately in need of such resources.

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