President Chakwera did not single out sugar prices to be investigated—CFTC

The CFTC is investigating this kind of fair trading in shops

* It was to investigate all price increases for any sign of unfair trading practices and provide weekly reports to the President’s office

* It is not the standard practice for CFTC to name the companies under investigations before the investigations are concluded and determinations made

By Duncan Mlanjira

Competition & Fair Trading Commission (CFTC) has denied that President Lazarus Chakwera did not single out sugar prices or its distributors for investigations but, in essence, directed the Ministry of Finance; Ministry of Trade & Industry; and the CFTC to “investigate all price increases for any sign of unfair trading practices and provide weekly reports to his office”.

This is a reaction to an assertion made by Consumers Association of Malawi (CAMA) on Thursday, saying CFTC was ordered by the President to investigate and inform the nation the reasons behind  scarcities and high prices of sugar on the market — but it has “not released a comprehensive report with all the details including naming the culprits.

CAMA said CFTC only identified and blamed some traders for hoarding the “sugar” but without providing names of such unscrupulous traders and any form of punishment after they were identified.

Released by Executive Director John Kapito, the public statement said consumers continue experiencing sugar scarcities and high prices and, therefore, appeals to CFTC to release names of traders that were found to be hoarding the commodity thereby creating high prices and its scarcities.

“It is also our plea to the Ministry of Trade to immediately intervene and assist consumers access sugar at the recommended prices and hold accountable those unscrupulous traders that are demanding consumers to buy other products when buying sugar — this is a practice that cannot be condoned by any civilized market,” Kapito said.

When contacted, CFTC spokesperson, Innocent Helema maintained that they do not recall any directive from the President that singled out sugar prices or distributors for investigations.

He explained that in collaboration with Ministry of Trade & Industry and other stakeholders, CFTC has, “in this regard, conducted a number of market surveillance activities and has made discoveries some of which point to the hoarding of sugar”. 

“It is not the standard practice for CFTC to name the companies under investigations before the investigations are concluded and determinations made,” he said. “The standard practice is that, once the investigations are concluded, the investigations report is submitted to the Commission (Board) for their determination.

“Once the determination is done, it’s when we invite the media houses to a meeting where we make the determinations public. The general public should expect pronouncements on some of these cases soonest considering that the Commission (Board) for the CFTC has now been fully constituted.”

Kapito alleged that it was unfortunate that “sugar is a controlled commodity with no competition regarding its production and distribution on the Malawian market giving consumers no alternative choices of supply”.

“Sugar distribution and pricing has remained a challenge to consumers run by a syndicate of corrupt and unscrupulous producers and  distributors, whose motive has been taking advantage of the poor consumers.

“The syndicate colludes on pricing and distribution, whose only motive is to maximize on profits and economically punish poor consumers who are going through one of the highest cost of living.”

But on Thursday, during Illovo Sugar Malawi’s annual general meeting (AGM), chairperson of the Board, Jimmy Lipunga highlighted some challenged in its performance of the 2023 financial year ended on August 31, indicating that they include “government pressure on sugar pricing, threats and actual issuance of import licenses and a finding of unconscionable conduct by the CFTC, which which the company is challenging in the courts”.

“The decision to introduce price increases responsibly, in the wake of record high input cost inflation and cross border arbitrage proved to be strategically correct,” he said in his report.

“It enabled the company to continue with uninterrupted supply of sugar in the domestic market but also enabled Illovo to protect the overall shape of its performance and continue to invest in the long-term drivers of growth.

“Protracted negotiations on the Irrigation Water Purchase Agreement (IWPA), though surmountable, could potentially derail the gains built into our plans for converting to gravity fed irrigation water from the Shire Valley Transformation Programme (SVTP).

“On the regulatory front, new land laws and regulations were introduced, some of which had the potential to negatively impact our operations in terms of land tenure in addition to the potential negative impact on Foreign Direct Investment (FDI) into the country.

“Fortunately, the process of continuous engagement between the government and the business community led by the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) bore some positive results to the extent that the amended versions were much more acceptable to businesses.

“During the year it was not possible  to conclude consultations on the much anticipated Sugar Bill being driven by the Ministry of Lands. Due to its importance in regulating the sugar industry, which remains unregulated contrary to other jurisdictions, we hope that the passing of the bill will be prioritised.