Minister of Trade Sosten Gwengwe has attributed the scarcity of cement in the country to shortage of foreign exchange, which is making it difficult for traders to import the product.
In recent weeks, the local market has experienced rising prices of cement owing to short supply on the market.
Speaking to journalists in Lilongwe on Wednesday Gwengwe warned cement traders against increasing prices beyond K7 500 per 50 kilogramme bag, which is recommended in the current prevailing economic situation.
The minister’s remarks followed a closed-door meeting he had with cement manufacturing firms and importers to find solutions to the scarcity, which is triggering price rises.
Gwengwe warned traders who are taking advantage of cement scarcity to raise prices, saying their import licences could be revoked.
He said: “Engaging in unfair trading practices such as charging exorbitant prices on cement is an offence that is punishable under the Competition and Fair Trading Act.
“I want to assure consumers that government will do everything possible to protect them from these unfair trading practices.”
Gwengwe said cement manufacturers such as Shayona Cement Limited, Cement Products Limited and Lafarge Malawi have not raised prices, but wondered why traders are taking advantage of the situation.
He said they have discussed with the Reserve Bank of Malawi to consider prioritising issuing of foreign exchange to cement importers to deal with the supply shortage.
The ministry’s preliminary market surveillance has revealed that the situation was exacerbated by the rising cement prices in Zambia, which had a negative impact on the local market through reduced supply of imported cement.
For instance, for the past two weeks, a bag of cement in Chipata, Zambia was selling at K5 600, but now it fetches around K6 500.
In view of the shortage, the ministry has issued cement import licences equivalent to over 100 000 metric tonnes to contain the shortage and stabilise the prices.
On his part, Joe Ching’ani who is Construction Sector Transparency Initiative chairperson, on Wednesday said except for Shayona Cement Corporation, the rest of the manufacturers had suspended production due to shortage of clinker, a key ingredient in cement production
He said although the country has not experienced prolonged load-shedding, the available power on the grid is at times not enough to satisfy the requirement for consistent operation of cement producing machines
“Controlled pricing by government also makes cement importation unattractive by traders,” he said.
But Gwengwe said he has received an assurance from cement manufacturers and major cement dealers of increased and constant supply of the product as the foreign exchange shortage is being being resolved.