Illovo Sugar (Malawi) Limited has dispelled rumours on social media that the country could experience shortage of the commodity on the local market because the company is not crushing any cane since November 2016.
According to the Malawi Stock Exchange (MSE)-listed sugar manufacturer’s public relations officer Ireen Phalula, the rumours are not true as the company has always had enough stocks even when the sugar-making machine stops working for a considerable period of time.
She said there is plenty of sugar in stock at both estates in Nchalo, Chikwawa and Dwangwa in Nkhotakota.
“We are set for the new milling season which normally starts in April every year after the rainy season,” said Phalula.
She said people should budget as they normally do and there is no need for panic-buying or stockpiling the commodity in their respective places.
Every year, Illovo Malawi stops production in November and resumes the following year in April, and in between, the company carries out several maintenance activities as it awaits the rainy season to end.
A response from an employee of Illovo Malawi circulating on social media, which heightened speculation reads: “In the meantime, we are not crushing any cane. We stopped in November 2016 and we will resume in April 2017.
“This is the period every year the mill does not crush cane for a period of about six months. So, during this period, the company always has enough stock to sell during off-crop season.”
Reports indicate that the local sugar market has not been good of late due to imported sugar as such Illovo Malawi already has more sugar than they need.
But Phalula refused to comment on this, saying Ministry of Industry, Trade and Tourism could be in a better position to comment.
As of Friday, the share price of Illovo Malawi dropped 6.25 percent to K150 from K160 per share the week before, but analysts could not give reasons for the slide.
Earlier, Illovo Malawi said it had secured new markets in the region ahead of the European Union (EU) quota abolition.
EU plans to scrap off sugar quotas this year, a development that will see Malawi, alongside other sugar-producing countries, losing a significant portion of their export market.
Currently, EU member States are limited to supply a maximum of 13.5 million tonnes of sugar against a consumption of 17 million tonnes a year, as the African, Caribbean and Pacific (ACP) States and least developed countries such as Malawi, supply a total of 3.5 million tonnes through their quota-free and duty-free access to the EU market. n