Sugarcane growers want contract review
Sugarcane growers have called on Illovo Sugar (Malawi) plc to review prices and contractual agreement between them and the company.
In a letter dated June 15 addressed to Illovo Malawi management, sugarcane growers led by Nkhotakota North legislator Henry Chimunthu Banda, accused the listed sugar manufacturer of skirting around growers’ concerns.
Last week, the sugarcane growers called Illovo Malawi officials to a meeting in Lilongwe to iron out their differences, but Illovo management snubbed the meeting and instead issued a statement responding to why prices this season have dropped.
This season, Illovo Sugar (Malawi) plc has slashed the price of sugar payable to growers by about 16 percent from K302 290 per tonne in 2018/2019 season to K253 290 per tonne in the 2019/20 season.
In his presentation last week, Chimunthu Banda demonstrated that this is the first time in 15 years that Illovo Malawi has slashed prices awarded to sugarcane growers.
The sugarcane growers have a Cane Supply Agreement with Illovo Malawi, which dates back to 1980. The agreement stipulates that after the sale of sugar, a grower gets 60 percent while Illovo Malawi gets the remaining 40 percent as Division of Proceeds (DOP), which growers are demanding that it be reviewed.
Reads the letter in part: “Surprisingly, in your purported ‘response’, no single issue has been addressed. Instead, you have opted to dwell on the trends and factors affecting sugar prices locally, regionally as well as globally.
“You have also opted to convey your engagements with government on the need to have policies that protect the domestic sugar industry. On our part, the reason we didn’t bother you with those points was not because we didn’t know about them, rather it was because they were uncontestable matters”.
In the letter, Chimunthu Banda said Illovo Malawi response on non-contested issues will no longer derail them as they are focusing on critical matters in pursuit of transparency and accountability.
He said Illovo Malawi has been furnished with growers’ demands either by the Sugar Association of Malawi, Lakeshore Cane Growers Association or by individual outgrowers, but there has been no favourable response and action.
The letter states that Illovo Malawi has been exploiting farmers in DOP unlike in other countries where DOP has been a subject of negotiations every three years.
This is the case with Illovo Tanzania (Kilombero Sugar Company Limited) and in Zimbabwe where
