Sweet Crisis: Inside Malawi’s Sugar Shortage—Hoarding, Black Markets, and Suspected Smuggling Rings Exposed!

Just like last year around this time, Malawians are once again facing the twin challenges of sugar scarcity and exorbitant prices.

From Chitipa and Karonga, through Mzuzu and Lilongwe, down to Blantyre, and further south to Chikwawa and Nsanje, our spot checks reveal that sugar is barely available on the shelves of major supermarkets. However, it is readily found in backyard groceries and on the streets, selling between K3,500 and K5,000—far above the set price of K2,600.

Even our Facebook survey confirms that across the country, Malawians are purchasing sugar at prices much higher than the recommended K2,600.

Interviews with consumers and our own investigations reveal that sugar is scarce in supermarkets because these are the only places selling it at the controlled price.

When new stock arrives at outlets such as SANA, Chipiku, Nsaname, Ekhaya, and Shoprite, demand soars as locals rush to buy at a lower price. Worse still, unscrupulous vendors purchase in bulk and resell it at inflated prices in townships and sometimes right outside these same supermarkets.

Further inquiries with six beverage manufacturers revealed that sourcing sugar through official channels—Illovo and its distributors—has become nearly impossible. These companies are now forced to buy from black market dealers at exorbitant prices to sustain production.

A Sugar Crisis

Malawi is in the grip of a sugar crisis, evidenced by its high prices in the black market and its scarcity in official retail outlets.

Illovo Sugar Malawi, which produces 90% of the country’s sugar, supplies over 60% of its total output to the domestic consumer and industrial markets, with some exported regionally. Last week, as Malawians struggled with soaring prices, Illovo’s interim Managing Director, Kondwani Msimuko, assured the public that there was adequate stock and that there was no need for concern.

However, despite this assurance, Msimuko expressed concern over retailers selling sugar beyond the recommended price and stated that Illovo was engaging the Ministry of Trade to intervene.

If sugar is available, why is it scarce?

Our investigations reveal that Illovo is currently holding back approximately 40% of its sugar stock in warehouses, awaiting government clearance for export.

Although neither Illovo nor the Ministry of Trade has confirmed this, Competition and Fair Trading Commission (CFTC) spokesperson Innocent Helema acknowledged that Illovo had approached the ministry seeking approval to export excess stock.

However, he could not confirm whether the request had been granted. Helema added that while CFTC is unaware of Illovo hoarding 40% of its stock, this is an area of interest, and they plan to investigate.

Malawians are questioning why Illovo would seek to export sugar when it is in short supply locally.

Black Market Operations

Our investigation has also uncovered how some Indian-owned superstores and companies are purchasing sugar in bulk, either reselling it on the black market or smuggling it to Zambia and Zimbabwe.

“It’s not that sugar is unavailable,” a source told us. “These major stores only sell a controlled amount on their shelves. The bulk of it is sold at night to black market dealers who then resell it at inflated prices in townships, pushing the cost up to K4,000 or even K5,000.”

Two well-placed sources—one within Illovo and another at the Mchinji border—confirmed separately that significant quantities of sugar are being smuggled to Zambia and Zimbabwe. They allege that powerful Indian-owned companies with strong government connections are facilitating these exports, with border officials unable to intervene due to ‘orders from above.’

For its part, CFTC’s Helema stated that while they are not fully aware of these specific issues, they have observed a spike in retail sugar prices despite no official increase from producers. The commission has launched investigations into traders engaging in excessive pricing and hoarding.

He further emphasized that CFTC does not tolerate violations of the Competition and Fair Trading Act (CFTA). “In April last year, the Commission penalized some sugar traders for unconscionable conduct,” he noted.

Additionally, Helema highlighted that penalties under the updated CFTA, effective July 2024, are now more severe. Companies found guilty of violations could be fined up to 10% of their total gross annual turnover, while individuals could face fines of up to 5% of their annual income.

He urged consumers to remain vigilant and report any business malpractices that infringe upon their rights.

Where is the Ministry of Trade in all this?

How is it regulating Illovo and the monopolization of sugar by powerful business groups?

WATCH OUT FOR PART 2.

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