Sugar prices have risen by about eight percent effective yesterday due to the weakening kwacha against major trading currencies, according to Illovo Sugar (Malawi) Limited.
A press statement from the sugar producer released yesterday said the local currency lost ground from K410 in September to K515 by November end to the dollar, shedding off about 26 percent of its value.
“The marked depreciation has a direct impact on the input costs of the company, which are largely foreign exchange-based since most of the non-cane raw materials that are used in the production of sugar are imported,” reads the statement in part.
Consumers have been complaining about high sugar prices, apparently pointing to an abuse of a dominant position in the market where Illovo is a monopoly.
Competition and Fair Trading Commission (CFTC) executive director Charlotte Malonda, commenting on the sugar market structure last month, said although it is not an offence to enjoy monopoly powers, the authority is watching the industry.
She said thus far, CFTC has not identified anything suspicious about sugar prices which would warrant a thorough assessment of the pricing system.
Malonda said in the absence of a detailed analysis of the sugar pricing system, CFTC cannot comment whether the sugar price in Malawi is fair or not.
Earlier, Illovo Sugar (Malawi) Limited public relations officer Irene Phalula said there are justifiable factors that drive sugar prices in Malawi.
She cited currency movements, inflation, increase in cost of fuel and other major commodity input costs such as electricity.
Phalula also said in April, the company negotiated a 28 percent increase in salaries for unionised staff.