Illovo Sugar (Malawi) plc has increased the price at which it buys sugar cane from its growers by 8.4 percent.
The price has increased from K225 168 per tonne to K244 245 per tonne, a move which has excited the sugar cane growers.
Annually, the Malawi Stock Exchange-listed sugar manufacturer signs an agreement with sugar cane growers in which the division of proceeds is shared, with 60 percent going to growers while Illovo gets a 40 percent share from sugar cane sales.
Sugar cane growers have been expressing concern over reduced prices, for instance, the recent share price for sugar and molasses payable to sugar cane farmers dropped from K302 000 per tonne in 2018/19 to K253 000 per tonne in 2019/20 season and reduced further to K225 000 in the current 2020/21 season.
In a statement, Sugar cane Growers Association of Malawi executive secretary Geoffrey Nkata in a written response on Sunday confirmed the raise, saying they have been discussing with Illovo the concerns of smallholder sugarcane growers with regard to declining prices of sugar cane.
He said: “There have been several efforts meeting with Illovo management to consider revising the price upwards. We also engaged government ministers to intervene in the case.
“The challenge with the low prices of sugar meant that the smallholder sugar cane farmers were not getting enough money to sustain their livelihoods and also invest in their sugarcane fields.”
Nkata said Illovo cited the promotion they are running which has increased sugar sales and the reduction of smuggled sugar into Malawi.
Illovo (Sugar) Malawi plc spokesperson Olive Kawelama was yet to respond to a questionnaire despite several reminders.
One of the concerned sugar cane growers who has been championing the need for increased prices, Henry Chimunthu Banda, who is also Nkhotakota North legislator, said in a written response yesterday that he was delighted with the news.
He said: “The intended outcome was to get improved prices. However, this doesn’t absolve Illovo of their wrongs.
“For instance, the basis of my query is on lack of transparency in the manner in which proceeds from sales of sugar and molasses are calculated and shared.”
Two weeks ago, Minister of Trade Sosten Gwengwe said government expects the sugar cane share price between Illovo and growers to improve following the coming in of Salima Sugar Company that is bringing competition on the market.
He said: “The establishment of Salima Sugar Company has enhanced the state of competition in the Malawian sugar market, which has substantially benefited consumers through stability in retail prices.”