Illovo Sugar Malawi Limited has announced a 15 percent price increase for sugar, one of the few most sought-after household necessity.
The development is likely to make life of most Malawians even harder as they are already grappling with the soaring prices of basic needs.
The sugar price increase comes barely a day after the Malawi Energy Regulatory Authority (MERA) also announced price hike for petrol, diesel and paraffin (for industrial use.)
Illovo Spokesperson Ireen Phalula said the price increase was a normal one which is implemented at the beginning of each sugar milling season.
Traditionally, the company’s milling season starts in April and ends in September.
The increase comes about four months after the sugar company effected another 12 percent hike last November.
The publicist said the price adjustment was in response to the unbearable economic conditions the country is currently going through as a result of the depreciation of the kwacha and the continued rise in inflation, among others.
Meanwhile, consumer rights activist John Kapito said in reaction to the price hike, the development will make life difficult for poor Malawians.
Kapito who is executive director of Consumers Association of Malawi (CAMA) blamed government for protecting the sugar company, a development he observed has resulted in Illovo monopolizing the sugar business and making huge profits.
“There are many institutions in Malawi that are failing to make similar profits like Illovo because government has refused to support and protect them, and they are on the brink of closing,” he told The Nation Newspaper.
Kapito wondered why Illovo is given the free hand to operate as if the market were not regulated.
In the year ended September 30 2012, the Malawi Stock Exchange (MSE)-listed company projected sales to be in excess of 300 000 tonnes, a four percent jump from the year before, buoyed by increased cane production.
Out of the sales, domestic market will account for about 55 percent of total sales, and that year-end stock will be carefully managed to ensure that the domestic market is fully supplied during the off-crop
The company, in the financial year, saw its revenue climbing by 71 percent to K30.6 billion (about $78.4m) from K18.1 billion (about $46.4m) same period the year before.
Illovo’s profit also went up to K9 billion (about $23m), a 143 percent increase from K3.7 billion (about $9.5m) the year before.Follow and Subscribe Nyasa TV :