People’s disposable incomes will be depleted further following a decision by Illovo Sugar Malawi Limited to increase prices of sugar by an average of nine percent.
The prices became effective on Monday December 12 and apply to all Illovo products.
Battling an inflation of 20.1 percent and reeling under new amendments to the Value Added Tax (VAT) Act that has seen government extending taxes to basic necessities such as piped water, bread and laundry soap, an increase in sugar prices is likely to haunt the already cash strapped Malawian consumer.
Currently, retail shops are on average selling 1kg of sugar at K650 while hawkers peg the price at between K700 and above.
Executive Director of the Consumers Association of Malawi, John Kapito, said the development is worrisome considering the many economic challenges facing the consumer today.
He faulted government for further escalating the plight of consumers with its decision to introduce VAT on basic commodities.
“People are already deficient of Vitamin A which is found in Sugar and with this price increase, many people will not be able to afford sugar,” he said.
Kapito lamented that consumers continue to be on the receiving end of policy decisions by government and the private sector.
“This is punishment to the poor. And because businesses use wrong calculations to compute VAT, it is the consumer who will suffer,” he said.
Announcing the new prices on Monday, Illovo said the price increase has been necessitated by continuing inflationary pressures.
The company observed that in the past year, while Malawi’s inflation has remained high at 20.1 percent, over the same period, it [Illovo] has effected two price adjustments of eight percent and nine percent which combines to a total of 17.7 percent.
“Hence, the company’s costs saving initiatives are being passed on to the general public in form of an annual price increase below annual inflation,” Illovo said in a statement.
Illovo said it recognises that sugar is an essential product/commodity and that in effecting price adjustments, the company strives to keep the increases a t the lowest levels possible. The company, however, said Malawi’s sugar prices continue to compare favourably against neighbouring countries at current exchange rates.
“Malawi prices are neither the highest nor the lowest,” the company said.
According to information contained in the new price list, customers will now be required to pay a unit price of K14, 282.90 for 20 prepacks of brown sugar weighing 1kg each and K13, 980 for white. A bale of 10 packs of brown sugar weighing 2kg each is now being sold for K14,003.30 while white is at K13,723.70
(Visited 414 times, 414 visits today)
Today’s top business story: Top Commercial Banks In Malawi
- Two acquitted in K4.3 billion RBM case – - August 12, 2022
- Shoprite confirms it will retrench staff, close shop – - August 11, 2022
- Tikudutsa muzowawa: Escom yapempha kukwezedwa mtengo kwa magetsi – - August 9, 2022