Malawian consumers are being forced to pay more on sugar following a decision by some unscrupulous traders to hike both wholesale and retail prices which Illovo Sugar Malawi Limited has described as illegal.
Illovo last increased sugar prices by an average of eight percent in December, 2016 and has not effected any increment ever since, however some wholesale and retail traders across the country have hiked prices due to what they claim ‘sugar shortage on the market’.
Nyasa Times has established that retail traders are now selling a 1kg pack of sugar between K850 and K900 from between K650-K700, arguing the commodity is in short supply on the market since the company halted production in November last year.
The decision by the traders is being influenced by some sugar wholesale vendors who are withholding the commodity to create the shortage thereby justifying their reasons to hike prices.
Every year Illovo stops production in November and resumes the following year in April to allow the company to, in between, carry out several maintenance activities as it waits rainy season to end. And wholesale traders have taken advantage of the situation to deliberately create shortage inorder to increase prices.
“We have not increased sugar prices. Each time there is an increase in prices we issue out a press statement; therefore those alleged new sugar prices unofficial (illegal),” Illovo Public Relations Officer, Irene Phalula told Nyasa Times in an interview.
Phalula described as pure theft the traders’ conduct to hike sugar prices on their own without any official communication from the company, insisting there is no sugar scarcity on the market despite the company suspending its production for a while.
In an interview several traders told Nyasa Times that they are being forced to increase the prices since sugar is scarcely available on the market, forcing them to incur more costs in search of the essential commodity as some wholesalers are withholding the product.
The traders’ decision to effect their own sugar price increase comes on background of Kwacha stabilization and improved inflation rate which is currently at 16.10 percent down from 20.1 percent.
Executive Director of the Consumers Association of Malawi (Cam), John Kapito said was not surprised with the sugar traders’ conduct, arguing Malawi remains to be one such market where the business sector always takes advantage of the poor consumers by unnecessarily raising prices of their goods and services.
Kapito has since condemned the traders’ conduct as detrimental to both the manufactures and consumers since such high prices deter consumers from being able to afford the offered products and services.
“Despite the kwacha stabilizing and inflation and bank interest rates reducing, we have noted that most consumer goods and services have risen during the same period when we expected the gains from these reductions to be passed on to consumers.
“And Malawi happens to be one such market where the private sector always takes advantage of the poor consumers by unnecessarily raising prices of their goods and services at same time every consumer expects the gains to be passed to them.”
He added: “Unfortunately this has included cheating by some traders who recently have hiked the price of sugar without economic justification and at a time when the producer Illovo has not increased prices of sugar.”
Kapito said his organization has over the years been lobbying government to operationalize the Consumer Protection Law to allow the establishment of a consumer council to take up the role of identifying malpractices on the market.
“These unjustifiable prices are hitting hard poor consumers who cannot access the most basic products like sugar and other services because of some greedy traders, the repercussions of these unjustifiable prices is detrimental to both the manufactures and consumers as the high prices deter consumers from consuming such products and thereby forcing manufactures to stop production because demand is reduced,” he said.
Earlier this year Phalula dismissed rumours of sugar shortage on the market, insisting that the company has always had enough stocks even when the sugar making machine stops working for a considerable period of time.Follow and Subscribe Nyasa TV :