No need for sugar imports

Since the National Export Strategy (NES)recognised sugar cane as a strategic crop, sugar has become a major export accounting for 6.7 percent of the country’s export earnings.

This achievement is a result of key investments in strategic partnerships and increased involvement of smallholder growers.

The country has over the years made tremendous efforts to expand the sugar cane industry.

In August 2016, government commissioned the Salima Sugar Factory which is run in partnership with Apollo Company and other private firms from India.

To maximise production, the company has engage 350 small and medium scale sugar cane producers.

Illovo Sugar (Malawi) Limited, the country’s largest sugar producer, is also expanding its production and acreage to accommodate more smallholder farmers surrounding Dwangwa and Nchalo estates.

The profitable trade deals with Illovo have lured an increased number of farmers dedicating their land to sugar cane farming.

According to the Sugarcane Growers Association of Malawi, the number of smallholder growers has risen from 3429 in 2014 to over 8000 last year.

The association attributes the rise to the arrival of more companies, including Ethcol and Presscane.

The proliferation of foreign sugar in the country at a time local production increase offers no hope to a smallholder farmer.

Massive stocks of sugars from Zimbabwe, Mozambique and other country are seen in most urban and rural trading centres.

It is paradoxical that this is happening just when Illovo produces almost 300 000 tonnes. Salima Sugar Company reported an initial production of 15 000 tonnes in 2017 which is expected to increase to 90 000tonnes this year.

This will bring the country’s sugar production close to 400 000 tonnes, twice the local demand of about 170 000 tonnes.

This means that by allowing sugar imports, government is going against its own policy of turning the country into a vibrant producing country.

Malawi is already a surplus producer striving to identify international markets for about 200 000 metric tonnes.

The trends on the world sugar market, however, are not encouraging.

Last year, the European Union removed quotas that offered sugar from members of the Preferential Trade Agreement a preferred market share.

This means Malawi’s sugar industry has to adjust its production to compete with sugar from Europe which enjoy massive production subsidies.

Other than liberalising the local market for one of its strategic export crops, the country needs to focus on finding new markets for its surplus to replace more competitive European markets

Efforts by government and its stakeholders to identify new export markets within the region will not yield much if the country allows sugar from other countries to flood the local market.

Nearly 8 000 farmers, who rely on sugar cane as their mainstay, will be the main losers. The decrease in the demand for the local sugar will mean low prices for sugar cane they supply to sugar companies.

In the end, unsustainable production will slow down the desired goals spelled out by the National Export Strategy.

It is time government started protecting its local sugar market from avoidable competition.