31 July 2014

Zambia: 'Zambia's Sugar Prices Higher'

A CONTINENTAL consumer watchdog says Zambia's sugar prices are relatively higher than expected.

African Competition Forum (ACF) said Zambia's sugar prices are above the world recommended market prices largely because of market power being vested in one existing large-scale producer.

In its findings on a study regarding the basis of high sugar prices in Zambia and three other countries recently, ACF says the country's policy to block imports has also contributed to the rising domestic prices of the commodity.

The consumer watchdog stated that sugar prices in Zambia have more than doubled over the last decade as the dominant producer Zambia Sugar Plc is selling the commodity at significantly higher prices in the domestic market.

"Zambia has been able to sustain prices well above the world market price as well largely as a result of market power vested in one firm, without imports to moderate the domestic price.

"Producers also have the ability to price domestic sugar at the highest cost with high margins, even though the country is a low-cost sugar producer," ACF said in its findings tabled at a recent conference in Marrakesh, Morocco.

Recent research findings by the Consumers Unit Trust Society (CUTS) International Lusaka show that the prices of sugar in Zambia are higher than expected and do not reflect the high productivity in the sector.

The result confirms findings of other studies by other organisations, including the market regulators, which show that sugar prices in Zambia are relatively higher than expected.

ACF study was extended to Kenya, Tanzania and South Africa.

Meanwhile, the Zambia Consumer Association (ZACA) has said the players in the market are exploiting the consumers using the liberalised market concept.

ZACA executive director Samuel Simutunda said in an interview that an average family of six was spending close to K50 on sugar within one month and this was exorbitant.

"We also carried out a research on the causes of sugar costing and our findings were that producers are taking advantage of operating in a liberalised economy with the primary interest of making profits," he said.

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