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Zambia Sugar is a dormant player, charges Dr Chigunta

Zambia Sugar is a dormant player, charges Dr Chigunta
By Joan Chirwa
Wednesday June 04, 2008 [04:00]

IT is sad that Zambia Sugar exported sugar to the Great Lakes region when local markets have an artificial shortage of the commodity, UNZA Development Studies lecturer Dr Francis Chigunta has said. And sources have questioned the reduction in export price for sugar from around K1,400 in March to about K1,200 in May at a time when the country was experiencing the shortages. Commenting on revelations that Zambia Sugar had exported around 3,000 tonnes of sugar to the Great Lakes region between March and May this year, Dr Chigunta said the dominance of the latter on the market had necessitated the current problems.

“It is a sad development that Zambia Sugar actually exported sugar when it had been refusing all this time and this is the more reason why we had a shortage,” Dr Chigunta said. “Zambia Sugar is a dominant player in the sugar industry. And with the Vitamin A fortification requirement for sugar sold on the Zambian market, this has made Zambia Sugar to exploit the consumers even more.”

According to documentation obtained by The Post, Zambia Sugar exported a total of 2,982.20 metric tonnes of sugar between March and May this year, against the company’s earlier denials that it had not done so in the recent past.

In March, the company exported 1,330.95 tonnes; 1,106.95 tones in April and 544.30 tonnes in May. However, Zambia Sugar on Monday only admitted to exporting 30 tonnes of sugar to Burundi on May 23, 2008, saying this was due to a system breakdown.

On March 25, 2008, Zambia Sugar exported 32 tonnes of sugar to Bujumbura, Burundi at US $440 per unit, higher than the US $365 per unit of sugar sold on May 23. Rough estimates indicate that in March, the sugar was exported at around K1,400 per kilogramme while the price was reduced in May to around K1,200 for the same quantity.

“The question is why Zambia Sugar exported at a much lower price in May when that is the time the country started experiencing shortages of sugar,” the source said. “From the figures, it is clear that the company is trying to make more money from local consumers than the export market, which is not fair at all.”

And Dr Chigunta has advised the government not to completely rely on market forces to determine the cost of commodities in the country to avoid exploitation of consumers.

“There is need to revisit the competition law so that we don’t have a reoccurrence of such situations where prices of commodities rise beyond consumers’ reach,” Dr Chigunta said. “Zambia sugar just wants to maximise its profits by creating an artificial shortage.

First of all, Zambia Sugar knew it would have less production, and should have notified relevant authorities so that we find a way of mitigating the shortage.

The company has been forced to supply to the local market after government announced that it would allow imports.”
Commerce permanent secretary Davidson Chilipamushi was not readily available for comment by press time.

Labels: FRANCIS CHIGUNTA, ZAMBIA SUGAR

posted by MrK @ 3:38 AM