Malawi is undergoing a severe sugar shortage, with high prices reported in both black markets and limited availability in supermarkets. Illovo Sugar is suspected of withholding stock while manufacturers struggle to source sugar legally, resorting to black market purchases. Regulatory bodies are now investigating the pricing and distribution practices, as consumer rights are seemingly compromised amidst alleged trade malpractices.
Malawi is currently experiencing significant difficulties due to a sugar shortage and inflated prices, similar to issues faced last year at this time. Surveys across various cities, from Chitipa to Nsanje, indicate that major supermarkets have minimal sugar supplies, which are plentiful in informal markets and on the streets, priced well above the regulatory K2,600. Both consumer feedback and investigations confirm that sugar scarcity is attributed to supermarkets being the only retailers adhering to the government’s controlled pricing.
Our findings reveal that as new sugar stocks arrive at outlets like SANA, Chipiku, and Shoprite, consumer demand spikes, prompting bulk purchases by unscrupulous vendors who then resell at higher prices within townships. Additionally, beverage manufacturers report challenges in sourcing sugar through official channels, resorting instead to purchasing from black market suppliers at inflated costs.
The sugar crisis highlights Malawi’s dependency on Illovo Sugar, responsible for 90% of domestic production. Despite assurances from Illovo’s interim Managing Director, Kondwani Msimuko, that adequate stock exists, it appears the company is withholding 40% of its available sugar. While awaiting government clearance for potential exports, suspicions arise regarding the lack of local supply despite the presence of excess stock.
Moreover, our investigation found that some superstores engage in bulk purchases of sugar, redirecting significant quantities to the black market or smuggling operations towards Zambia and Zimbabwe. Internal sources indicate that powerful business entities are profiting from the situation, while reports suggest collusion with border officials obstructing appropriate oversight.
In response to rising sugar prices, the Competition and Fair Trading Commission (CFTC) is investigating retail pricing practices, emphasizing zero tolerance towards violations of the Competition and Fair Trading Act. CFTC spokesperson, Innocent Helema, noted recent spikes unrelated to producer price increases and announced the implementation of stricter penalties expected in 2024 for violators. This initiative seeks to safeguard consumer rights and ensure fair trading practices.
The Ministry of Trade’s role remains unclear, particularly regarding its oversight on Illovo and the broader market influences exerted by powerful business groups. Further scrutiny into these matters is essential as the sugar supply crisis persists. The discussion will continue as more details emerge in upcoming reports.
Malawi is facing a significant sugar crisis characterized by rampant inflation and scarcity in formal retail markets. The investigations suggest issues including hoarding by major suppliers, black market activities, and inadequate regulatory actions from authorities such as the Ministry of Trade. The Competition and Fair Trading Commission is poised to respond with stricter enforcement to protect consumer interests. Further developments and deeper inquiries will shed light on the systemic issues at play.
Original Source: www.nyasatimes.com
