* This may culminate into a full-fledged investigation against the company depending on the explanation we get
* We are also alive to the fact that this increment comes barely five months after the company effected a 33% increment on sugar products following the currency realignment
By Duncan Mlanjira
Following the announcement on the increase of prices of sugar made today by Illovo Sugar Malawi Plc, Competition & Fair Trading Commission (CFTC) says it is in process of engaging the company to enquire on the reasons behind the upward adjustment.
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When asked if they were aware of the decision by Illovo, CFTC’s public relations officer, Innocent Helema said they also have taken note of the development — thus their going forward to engage Illovo Sugar Malawi.
“This may culminate into a full-fledged investigation against the company depending on the explanation we get,” he said, adding that this will be after writing to the company to explain the reasons behind the increase — as per “the standard practice on matters of this nature”.
“We are also alive to the fact that this increment comes barely five months after the company effected a 33% increment on sugar products following the currency realignment,” he said.
“CFTC was established to, among others, safeguard consumer welfare. We, therefore, take issues of price increases seriously as they have a bearing on the very consumer welfare we are established to safeguard.”
Innocent Helema
According to a notice from Illovo dated April 20, 2024, recommended retail price of 1kg packet of brown sugar has been pegged at K2,300 with refined sugar at K2,600 per kg.
This comes as the company is rolling out its sugar production ready for distribution as the country expects normalization of the commodity on the market, which has been scarce across the country leading to some unscrupulous traders to hoarde it in order to soar its prices on the market.
After buying from distributors at exorbitant prices, retails traders also adjusted their prices from the recommended prices of K2,000 as of January to as high as between K4,000 and K5,000 for the 1kg packet of brown sugar.
Meanwhile, Salima Sugar Company Limited, which was not meeting its requirements to distribute its commodity on the local market and opting to import, has now opened up after it opened its 2024 sugar production season to provide Malawians with sugar through their depots that will be opened across the country.
The first production line was witnessed by Minister of Trade & Industry, Sosten Gwengwe last week at Salima Sugar premises, saying this was one way of dealing with scarcity and exorbitant prices of the much-sought-after commodity sugar in the country.
The company is being overseen by Greenbelt Authority Board, which undergone reformatory processes after termination of its contract with Aum Sugar Co. Ltd — that was responsible for breaching its mandate of providing for local retail by opting to export.
At the factory in Salima last week, Gwengwe said the commencement of sugar production at the factory will help fix shortage of sugar in markets and stabilise prices, adding: “Malawi is a sugar exporter but last year production was seriously affected by Cyclone Freddy that led to scarcity of sugar in the country since December.
“Salima sugar has started its cycle today and we are flooding the market with sugar at normal prices and people will not scramble for the commodity anymore,” he said.
For Malawi to be economically mature, Gwengwe said it needs to focus on production than trading, adding that it is important for Malawi to escalate production using commercial agriculture which will align to pillar two of MW2063 national vision in order to spur economic growth.
Executive Chairman for Salima Sugar Company Limited, Wester Kosamu said the company has already embarked on a number of activities to ensure that Salima sugar is available on the market.
“We have already earmarked 1,000 hectares of land which we plan to plant cane,” he said. “We are also planning to expand the milling to be producing more sugar as our sugar has been scarce on the market.
“We advertised for distributorship and we have signed contracts with distributors that will be selling our sugar across the country.”
Kosamu said the company plans to collaborate with over 250 small scale farmers that are managing cane around the factory and give the idle land the company has to other small scale farmers willing to work with the company with each farmer expected to get two hectares of the land.
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