Illovo Sugar (Malawi) Limited Plc says prolonged power outages are among the reasons expected to dampen sugar output for the year ending August 2018.
The firm said this is apart from the expected climatic conditions in the coming year.
In its published audited financial statements for the five-month period ending August 31 2017, the Malawi Stock Exchange (MSE)-listed company said cane growth has been impacted by inconsistent electricity supply to irrigate the crop as continuing low lake and river water levels impacted upon Electricity Supply Corporation of Malawi’s (Escom) ability to generate sufficient hydro-electric power.
However, Illovo is not entirely downbeat.
“Normal weather patterns for the ensuing year to August 2018 and an anticipated improvement in both lake and river water levels, with the expected return of the rains in December 2017, should assist Escom’s power generation operations which should provide a more reliable and consistent supply of electricity to both estates during the year,” reads in part the statement accompanying the financial results.
“Longer term, a combination of the ongoing agricultural yield improvements at Nchalo [in Chikwawa[, including the continued phased installation of additional efficient irrigation systems, planned structural changes within the agronomy sections and with additional cane planted by out growers, are all expected to result in improved cane yields and higher sucrose content in cane.”
Illovo is not alone to be impacted by the prolonged power outages.
Last month, cement manufacturing firms said their output has also been affected, a development that has forced some of them to raise cement prices.
Shayona Cement public relations officer Rowland Mwalweni yesterday said the situation is now getting worse as the company is now operating below 50 percent, producing about 6 000 bags a day instead of the normal 13 000.
Ministry of Industry, Trade and Tourism spokesperson Wiskes Nkombezi said as a short-term remedy, importation of cement will be allowed to deal with the shortage, which has also pushed up prices.
“The import licences so far issued would stabilise supply and prices of cement,” he said
Electricity Supply Corporation of Malawi (Escom) has engaged in massive load-shedding of between nine hours and 25 hours largely due to reduced water levels in Shire River, the source of about 95 percent hydropower generation.
In an interview this week, Economics Association of Malawi (Ecama) president Henry Kachaje said power outages will negatively affect the private sector, especially the manufacturing firms.