Malawi’s Sugar Crisis: Shortage, Black Markets, and Hoarding Uncovered
Malawi is experiencing a sugar shortage and high prices as consumers find sugar readily available in the black market, while supermarkets are largely empty. Illovo Sugar Malawi has been accused of hoarding stock, prompting investigations into pricing practices and black market operations. Regulatory authorities are looking into the situation as consumers suffer from scarcity and inflated prices.
Once again, Malawians are grappling with a significant sugar shortage and dramatically elevated prices, echoing the dilemmas faced last year. Our observations across various regions—from Chitipa to Nsanje—indicate that sugar is largely absent from major supermarkets, yet it is available at inflated prices in local shops and on the streets, exceeding the government-set price of K2,600, reaching K3,500 to K5,000 instead.
Surveys conducted on social media highlight that consumers nationwide are compelled to purchase sugar at prices far above this controlled figure. Conversations with shoppers and investigations elucidate that supermarkets maintain limited stock due to adherence to regulated pricing. Once fresh stock is delivered at outlets like SANA and Shoprite, frenzied demand ensues, prompting opportunistic vendors to bulk-purchase and resell at much higher rates.
Investigations with six local beverage manufacturers reveal that securing sugar through official distributors has become extraordinarily challenging. Consequently, these companies have resorted to acquiring sugar from black market sources at exorbitant costs, jeopardizing their production sustainability.
The sugar crisis in Malawi is compounded by high black market prices and the scarcity of sugar in stores. Illovo Sugar Malawi, which accounts for 90% of the nation’s sugar production, claims to supply over 60% to domestic markets and has plans for regional exports. Despite the company’s assertion of adequate stock, Interim Managing Director Kondwani Msimuko voiced concerns regarding retailers charging above the recommended price and indicated efforts to collaborate with the Ministry of Trade for intervention.
A significant factor contributing to the scarcity is that Illovo is allegedly withholding around 40% of its sugar stock in warehouses, pending government approval for export. Although neither Illovo nor the Ministry of Trade has officially confirmed this claim, a spokesperson from the Competition and Fair Trading Commission has acknowledged that an investigation into these matters is warranted.
Our investigation further uncovered the involvement of certain Indian-owned businesses that are bulk purchasing sugar, contributing to its smuggling into neighboring countries. A reliable source remarked, “It is not that sugar is unavailable; the bulk of it is sold at night to black market dealers who inflate prices in the townships.”
Investigators have identified significant smuggling of sugar to Zambia and Zimbabwe, allegedly facilitated by powerful Indian-owned companies with government connections. A spokesperson for the Competition and Fair Trading Commission has observed a rise in sugar prices, prompting inquiries into traders engaged in unfair pricing practices, affirming that violations will not be tolerated.
The Ministry of Trade’s role in regulating Illovo and the consolidation of sugar resources by influential business entities also raises concerns. There is a pressing need for regulatory enforcement and consumer protection in light of these issues. Future developments regarding the regulation of sugar pricing in Malawi will be crucial.
Part Two of this investigation is forthcoming.
Malawi is currently facing a severe sugar shortage, exacerbated by inflated prices and black market operations. Illovo Sugar Malawi’s management claims there is sufficient stock, yet evidence suggests substantial hoarding and smuggling activities. Investigations are underway by the Competition and Fair Trading Commission to address these burgeoning issues, while consumers are encouraged to report any malpractices.
Original Source: www.nyasatimes.com
