Parliament on Friday discussed sugar cane growers’ concerns over low prices at which Illovo Sugar (Malawi) plc buys their crop.
This prompted Minister of Trade Sosten Gwengwe to call for a win-win share of proceeds from sugar, one of the country foreign exchange earners.
Raising the issue before Parliament adjourned sine die, Nkhotakota North legislator Henry Chimunthu Banda, who is also a sugar cane grower, asked the minister to explain whether the ministry was aware of the low sugar cane proceeds offered to growers by Illovo.
He further asked if the ministry was aware that the share price for sugar and molasses payable to sugar cane growers by Illovo’s Dwangwa Estate dropped from K302 000 per tonne in 2018/19 season to K253 000 per tonne in 2019/20 season and has reduced further to K225 000 in the current 2020/21 season.
Chimunthu Banda also questioned why the drop in prices is happening when prices of inputs such as fertiliser and herbicides have been rising.
Responding to the questions, Gwengwe said government expects the situation to improve following the coming in of Salima Sugar Company, which has brought competition to the market.
“In fact, the retail price of sugar has reduced from an average of K900 in the 2017/18 financial year to K800 in the 2019/20 financial year,” he said.
The minister acknowledged that the country is flooded with illegal sugar imports from Mozambique, Zambia and Tanzania, which is negatively affecting the domestic sugar industry.
To avert the situation, Gwengwe said the Ministry of Trade is working with the Malawi Revenue Authority and the Malawi Police Service to enhance border patrols to curb smuggling.
He explained that importation of sugar is licensable under the Control of Goods (Import and Export Licence) Regulations 2020; hence, importation of sugar is restricted as the country produces enough sugar to satisfy its domestic demand and the export market.
On his part, former minister of Finance Joseph Mwanamvekha, who is also Democratic Progressive Party spokesperson on finance matters in Parliament, challenged the Ministry of Trade to continue working on strategies that will reduce sugar prices further, observing that smuggling is happening because sugar prices in neighbouring countries are low.
Mzimba North legislator Yeremiah Chihana (Alliance for Democracy) called for a complete overhaul of the sugar industry to ensure Illovo Malawi is not disadvantaged as an investor.
Sugarcane Growers Association of Malawi (Sugam) figures show that there are about 8 000 sugar cane growers in Chikwawa and Nkhotakota.
Illovo also grows its own sugar, which constitute about 80 percent of all the sugar processed by the company’s factories while growers contribute the remaining 20 percent of sugar cane production.