Ministry of Trade and Industry has blocked Illovo Sugar (Malawi) plc from exporting sugar, saying the company should prioritise stabilising supply on the domestic market.
Minister of Trade and Industry Vitumbiko Mumba disclosed this on Wednesday after an acute shortage of the commodity emerged in some parts of the country, although the main sugar producer, Illovo, opened its crushing season.
Mumba, who briefed members of the media on interventions his ministry is doing to arrest the situation, said apart from dealing with transporters who divert sugar while in transit, the ministry has not approved Illovo’s application for an export permit.
He said: “Illovo applied for an export licence in April to export 6 000 metric tonnes of sugar in June but looking at the current situation, where the season opening was delayed, affecting domestic supply, the ministry has not approved the export permit.”
The minister said this decision has been made to ensure that supply at the domestic market is sufficient before considering exports although Illovo needs to export to earn foreign exchange for some of its production requirements, including importation of spare parts for maintenance.
On measures the ministry is taking to deal with issues of informal cross-border trade of sugar, Mumba said they discovered that some transporters divert sugar to Zambia and Tanzania, and to arrest the situation, trucks will be carrying sugar directly from factories to retail shops with security escort.
“Currently, we are finalising the arrangements to ensure that trucks are transporting the commodity with security escort. In addition, Salima Sugar, for instance, will be tracking the trucks using technology to ensure that the movement of sugar is monitored,” he said.
Both Illovo Sugar (Malawi) plc acting managing director Kondwani Msimuko and Salima Sugar company executive chairman and chief executive officer Wester Kosamu confirmed that their production started late because of weather challenges but promised to stabilise supply starting on Thursday.
“The first reason is that informal cross-border trade has led to sugar being diverted by local traders to neighbouring countries. This has created a shortage in some areas of the local market, despite Illovo having released sufficient stocks to meet domestic demand.
“The second reason is the delayed start of our 2025 crushing season at both Nchalo [in Chikwawa] and Dwangwa [in Nkhotakota] estates caused by ongoing adverse weather conditions, including unexpected rains which have affected field access and slowed down harvesting operations,” Msimuko said.
Kosamu said Salima Sugar Company Limited also delayed opening because of maintenance works but although it’s production capacity is low at 22 000 tonnes per year, the opening of the factory on Tuesday will supplement Illovo’s efforts to stabilise supply.
Meanwhile, Illovo admitted that its sugar exports significantly dwindled in its first-half due to increasing demand on the domestic market the situation which affected its forex generation and consequently delayed importation of spare parts for maintenance.
“Off-crop maintenances were affected by delays in delivery of critical spare parts stemming from persistent forex and fuel constraints,” said the company in its financial results.
Sugar remains one of Malawi’s three main export crops, alongside tobacco and tea.
