High cost of sugar

SUGAR is an indispensable commodity in every household in Zambia. It is a necessity for most households, at least in our country. This is manifest by the stocks of the commodity, from manufacture to the consumption.

Apart from households, the hospitality industry adds to the sweet stay of its customers by ensuring their larders are well-stocked with sugar. The availability or non-availability of the commodity in a hotel can add to or deduct from its good name.

In terms of food value, it is a primary school aid that sugar is a source of energy. Once absorbed by the body, the sugar is converted into energy by the body. Because of this, sugar becomes an import component of the diet, if taken in required mounts.

It is therefore a matter of concern in the wake of revelations that the price of sugar in Zambia is too high despite the low production cost. The results of the scoping study conducted by the Consumer Unit Trust Society (CUTS) should not be ignored by stakeholders.

The price of sugar averages K18 per 2 kilogramme and K9 per one kilogramme. It is not a presumption that consumers find it hard to afford the commodity which is produced just over 200 kilometres from Lusaka. Though the findings are not conclusive on the causes of the high sugar prices, CUTS should be commended for bringing this issue to the fore. In the absence of clear findings, CUTS attributes the high prices to costs of production, market structuring and protectionism.

In examining these causes, it becomes important to seek to understand better how these three factors affect the prices. Once the factors that push up the price are determined, government should engage the Zambia Sugar Company with aim of making prices affordable.

The cost of production can indeed lead to high prices. It is known that the bulk of the labour used in producing sugar is sourced from Kalabo in Western Province as seasonal labour. The company engages more than 4,000 seasonal agricultural workers during peak periods on its cane estates located along the Kafue River. The Zambia Sugar Company produces from 200,000 to 450,000 tonnes of sugar per year. Some of it is consumed locally while the rest is exported to markets in East Africa and the European Union. With all this, it is yet to be established how the price of the commodity remains exorbitant for local consumers in particular.

The Zambia Sugar Company still occupies a larger share of the market in Zambia. Though Kafue Sugar, a new entrant on the market is trying to get a share of the same market, this has not helped lower the price of the commodity. This should be a matter of concern not only to CUTS but to government as well. As CUTS has observed there is need for further research to establish the cause of the high prices. If, for example, it is found that the cost of production is high, government can help bring it down by, say, removing taxes or relaxing any import requirements on items that go into the sugar-making process.

The market structure, cited as another possible reason, leading to high prices, should be an issue of concern to government. The involvement of numerous middlemen can make the commodity expensive by the time it reaches the consumer, who is also made to bear the cost incurred along the marketing chain. If the government policy of Vitamin A fortification is making the price high, then government needs to revisit its decision and find cheaper ways of making sugar more affordable for most households.

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