The market has witnessed a sharp jump in the price of sugar to US$4 per 2 kg from the recommended retail price of US$2,80 on increased demand emanating from a shortage of the product.
The product has been in short supply for months now which could have fed into speculation that the sugar sector was struggling to supply the market.
In a statement this week, the Zimbabwe Sugar Association (ZSA) said it holds adequate sugar stocks for local consumption.
“The demand for sugar will spike because of the operating environment and speculative behaviour by some market players. However, despite these factors, the stocks on hand are adequate to meet normal local demand,” the sector said.
It added that the existing stocks of the product would be boosted next week when the cane milling season resumes operations.
In a statement, the Confederation of Zimbabwe Retailers (CZR) said the increase was unjustified as the suppliers’ prices had not changed.
However, CZR president Denford Mutashu said the association had noted with dissatisfaction the “number of widely branch networked retailers and wholesalers struggling” to access the product from suppliers”.
“This situation must be fixed to reduce seemingly arbitrage pricing in the market emanating from the informal sector. There are ongoing engagements with ZSA to ensure supply into formal channel retail and wholesale stabilises and all delivery backlogs are cleared,” he said.
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We, however, note that the price of sugar is obeying the law of demand and supply. While the industry says it has adequate stocks, this is not reflecting on the ground as the product is not available on the market.
Those with the product are capitalising on the high demand.
It is the duty of the industry to ensure that the product is in the market. Mutashu said some players are struggling to access the product which allows the few ones with the sugar to charge high prices as the product is in high demand.
There is no need to drag the Zimbabwe Republic Police Licensing Inspectorate and the Financial Intelligence Unit in the matter as Mutashu suggested this week. In fact, it will be an abuse of authority to drag these institutions in an issue which is addressed by fixing the supply bottlenecks.
The two institutions have pressing issues in their in-trays and must desist from poking its noses into an issue whose solution is known.
Sugar is a basic commodity which is dear to the hearts of citizens. Finance minister Mthuli Ncube was last year forced to revise his figures following a backlash when he proposed a sugar tax to raise money for the health sector.
We need to look ourselves in the mirror before we poison the environment for business. ZSA should take the flak and address the challenges in the market.
There is no point in claiming there is plenty amid shortages. The proof of the pudding is in the eating.
