Malawi faces a severe sugar shortage, marked by soaring black market prices and limited supermarket availability. Illovo Sugar Malawi, the principal producer, holds back stock for potential export, resulting in public disbelief. Vendors exploit the situation, selling sugar at inflated rates, prompting investigations by regulatory authorities. Amidst this crisis, concerns about regulatory oversight and the monopolization by powerful business groups are pressing.
Malawi is once again experiencing a severe sugar shortage, mimicking the difficulties faced last year. Consumers report that sugar is nearly absent from major supermarkets, yet it is available at inflated prices in smaller stores and on the streets, where it sells for K3,500 to K5,000, significantly above the government-set price of K2,600. A recent survey indicates that many Malawians are forced to pay these higher prices due to limited availability.
Our investigations reveal that major retailers only offer sugar at the controlled price, leading to overwhelming demand when shipments arrive. Unscrupulous vendors exploit this by purchasing stock in bulk from supermarkets and reselling it at marked-up prices in townships. Beverage manufacturers express frustration at the difficulty of sourcing sugar through official channels, as they now have to turn to the black market to maintain production.
Illovo Sugar Malawi, responsible for 90% of the country’s sugar production, supplies most of its output to the domestic market but also exports regionally. Illovo’s interim Managing Director assured the public of sufficient stock, yet expressed concern over retailers selling sugar at inflated prices, indicating ongoing discussions with the Ministry of Trade to address these issues.
Reports suggest Illovo is withholding approximately 40% of its sugar stock in warehouses pending government export approval. Although unconfirmed by the Ministry of Trade or Illovo, the Competition and Fair Trading Commission (CFTC) noted potential interest in these practices, leading to calls for investigation regarding Illovo’s export plans amidst local shortages.
Additionally, sources indicate that some superstores are purchasing sugar in bulk, thereby facilitating its sale on the black market or smuggling it across borders to Zambia and Zimbabwe. A whistleblower remarked that while sugar is accessible, large quantities are sold covertly to black market dealers who then inflate prices for consumers.
CFTC spokesperson Innocent Helema stated that while they lack full knowledge on specific allegations, they are aware of rising sugar prices in retail despite the absence of official producer price hikes. CFTC has initiated investigations into traders suspected of price manipulation and hoarding, with stricter penalties under the updated Competition and Fair Trading Act set to take effect in July 2024.
As the sugar crisis persists, questions arise regarding the Ministry of Trade’s role in regulating Illovo and addressing monopolistic practices by influential business entities. The ongoing issue calls for increased scrutiny and proactive measures to protect consumers from exploitative pricing and ensure fair access to essential commodities.
In conclusion, Malawi is currently grappling with a significant sugar shortage characterized by high market prices and limited accessibility in official retail outlets. Investigations reveal manipulation by vendors and entrepreneurs, leading to widespread black market activity. Regulatory bodies are called to action as scrutiny increases on the monopolization of sugar supply, raising concerns about consumer protection and equitable distribution of resources.
Original Source: www.nyasatimes.com
