Lack of competition pushing up sugar prices in Zambia

LACK of serious competition in the sugar industry which is dominated by Zambia Sugar Company of Mazabuka is to blame for the current high prices of the commodity, says Zambia Association of Manufacturers (ZAM) chief executive officer Maybin Nsupila.

Mr Nsupila said little competition in sugar production in Zambia has resulted in high cost of the commodity in Zambia.

And Action Aid Zambia head of economics Patrick Shindano has accused Zambia Sugar Company Limited of taking advantage of its lion’s share in the market to create a monopoly and start overpricing on sugar.

Mr Nsupila said there was little competition in the sector to influence prices of sugar on the local market resulting in accusations of price-fixing in a tightly competitive market.

“What we need is more investment in the sugar industry in order to have a fair influence on pricing; right now Zambia Sugar has very little or no competition,” he said.

Mr Shindano explained that the absence of competition has disadvantaged smallholder sugar producers who have failed to make any meaningful impact in the industry.

He  said government should intervene in the Zambia Sugar  case which was already enjoying huge production cost incentives.

“Zambia Sugar gets most of its profits from the end products, which brings in over three quarters of income, compared to what it spends on paying company tax while enjoying a huge profit,” he explained.

He said it was unfortunate that the company had failed to give back to the Zambian people by a way of low sugar prices.

Currently, Zambia Sugar retail prices remain the highest on the market with a two (2) kilogramme packet selling at an average price of K22.