Cdedi demands sugar price reduction

Centre for Democracy and Economic Development Initiatives (Cdedi) has joined government in demanding immediate reduction of sugar prices.

The organisation’s demand comes two days after the Minister of Trade and Industry Simplex Chithyola Banda issued a statement ordering the sugar producer and trader to reduce the price of industrial sugar within seven days.

Addressing the media in Blantyre yesterday, Cdedi executive director Sylvester Namiwa demanded the reduction of both industrial and domestic sugar prices.

However, Illovo Sugar Malawi plc which has a 95 percent market share of the commodity has already refused to commit to reduce the price within the stipulated time, arguing that issues of pricing are decided upon internal evaluation of various factors.

Namiwa noted that the current dispute was a result of lack of regulation of the sugar industry, which for decades gifted Illovo Sugar Malawi plc with a monopoly of the industry.

The dispute between government and the company started after the ministry issued two sugar import licences to Mugisha Investments to bring into the country 20 000 metric tonnes of brown sugar which the local sugar giants protested.

Namiwa observed that the monopoly in the industry has come about because the law does not effectively regulate the growing of sugarcane, sugar production, imports and exports.

“Malawians may wish to know that all this drama is happening as a Sugar Industry Bill of 2021 is gathering dust at Capital Hill in Lilongwe… It is our considered view that sanity can only prevail in the sugar industry with the passing of this Bill.”

Currently, the industry is being governed by the Control of Goods Act (COGA) of 2018 that replaced the 1950 Act.

Consumers Association of Malawi executive director John Kapito backed Cdedi arguing Illovo Sugar was exploiting consumers and abusing its market power.

Kapito also blamed government for failing to protect consumers by not controlling the skyrocketing prices.

Locally, sugar is trading at a high K1 500 while industries are buying a metric tonne at $1250 (about K1.3 million). 

Namiwa said while pushing for the immediate sugar price cut, his organisation also intends to lobby individual legisltaors  and relevant parliamentary committees to ensure that the Sugar Industry Bill is prioritised and transacted during the next sitting of Parliament.

Last week, Cdedi wrote the Public Accounts Committee and the Trade and Commerce Committee of Parliament to hold a public inquiry into the matter.