CFTC issues 34 notices of infringement to cement traders to explain their price increases with supporting documented evidence

A 50kg bag of cement jumped from MK26,000 to MK50,000

* As it initiated processes towards full investigations against the cement price surges by conducting inspections to establish the actual prevailing prices

* And availability of cement on the market and whether traders are not engaging in unfair trading practices such as exploitative pricing

By Duncan Mlanjira

Competition & Fair Trade Commission CFTC has initiated processes towards full investigations against the cement price surges and has since issued 34 notices of infringement to traders and requiring them to write to CFTC explaining their prices with supporting documented evidence.

Public relations officer, Innocent Helema says CFTC conducted the inspections “to establish the actual prevailing prices and availability of cement on the market and whether traders are not engaging in unfair trading practices such as exploitative pricing”.

Apart from the 34 notices of infringement to traders, CFTC has also written some cement manufacturers requiring them to explain the recent increases in their cement prices and shortages.

“We are still collecting feedback from the manufacturers and traders which will inform the enforcement direction the CFTC will take,” Helema said. “The investigative processes are underway against the manufacturers and traders.”

Government recently intervened on cement scarcity and its exorbitant prices  by removing the 10% surcharge on imported cement — opening up import competition for foreign companies to bring the product into the country — and asked if it is in line with fair trading practices considering what others see as price manipulation that may disadvantage local producers in case they face production cost pressures, Helema said the decision “does not violate any provisions of the Competition and Fair Trading Act”.

“Competition law is designed to protect the competition process and not competitors. Import competition is a key element in ensuring robust competition that benefits consumers.”

On August 13, Minister of Trade & Industry, Vitumbiko Mumba announced new measures to curb rising cement prices by removing the 10% surcharge on imported cement and lifted guided values on Zambian imports.

Mumba told the media that supply agreements were made with Chilanga Cement Company and Sinoma Company, that will ensure adequate availability as the two Zambian companies will supply up to 300 tonnes of cement daily at reduced prices to stabilise the local market.

The Minister indicated that Chilanga Cement Company agreed to supply Malawi with 300 tonnes of 32.5N Portland cement per day at US$105 per tonne, which is US$9 less per tonne — with a similar engagement with officials from Sinoma Company Ltd,  who have proposed to supply cement at US$105 per tonne for 32.5N and US$118 per tonne for 42.5N, which is US$7 less per tonne

According to Mumba, 12,000 bags of cement will arrive in the country this week,   signalling government’s commitment to  ensuring imported cement is available in the country at affordable prices.

“These measures are designed to reverse the price hikes that have seen a 50kg bag jump from MK26,000 to MK50,000 and ensure cement is affordable and readily available to Malawians,” Mumba told the media, while warning traders in the country against taking advantage of the scarcity of cement to overcharge the product.

Meanwhile, CFTC says it appreciate the importance of the cement industry to the economy and that currently, the authority “is doing a market study to understand the industry better and provide relevant and necessary short, medium and long term interventions to ensure a competitive sector that benefits consumers and the economy at large”.