A 1kg packet of sugar, which should retail at the government-recommended price of $1.77, is now selling for as much as $3.50 on the black market, nearly double the official price.
Surveys indicate that vendors are selling sugar at exorbitant rates due to limited supply and allegations of hoarding by some distributors. The situation has led to long queues in retail outlets and chain stores, with many consumers returning home empty-handed.
“There are a lot of things that need sugar,” said consumer Jonathan Jerry. “It’s especially hard for families with small children. The stress of moving around shops just to find sugar is disturbing. It can make you angry.”
The country’s main producers, Illovo Sugar Malawi, a subsidiary of Illovo Sugar Group Limited, and government-owned Salima Sugar, have both cited rising inflation and input costs as reasons for the current price hike. Salima Sugar Chief Executive Officer Wester Kosamu confirmed that the company plans to produce 22 000 metric tons this year to ease the shortage, but admitted challenges remain.
“Salima Sugar is not a big company that can satisfy the whole market,” Kosamu explained. “But we are doing our best to supplement existing supplies. I must confess, however, that some distributors are hoarding sugar. That is true.”
In response to mounting pressure, Malawi’s Competition and Fair Trading Commission (CFTC) has launched an investigation into possible exploitative pricing practices.
“It is a violation of the Fair Trading Act to increase prices unreasonably,” said CFTC spokesperson Innocent Helema. “We are currently collecting data to identify and penalise traders involved in excessive pricing.”
The sugar crisis has also drawn the attention of the Minister of Trade and Industry, Virubiko Mumba, who recently conducted inspections and confirmed the hoarding of sugar in some major warehouses.
Despite the current turmoil, Economists predict Malawi’s sugar market will see mixed growth patterns in the years ahead, with a projected peak growth rate of 18.94% in 2028.
--ChannelAfrica--
