Strong Demand Drives Sugar Sales

Zimbabwe’s sugar industry sales into the domestic market for the quarter ended June 30, 2021 increased 31 percent to 86 843 tonnes largely driven by strong demand.

Sugar producer, Hippo Valley Estates, in a trading update, said the growth in sales was also a result of the non-repeat of supply containment measures implemented in the prior year to curb then existing speculative trading on account of price distortions.

“Price realisations in both local and foreign currency on the local market remained firm in current purchasing power terms,” Canaan Dube, the company’s chairman said in the trading update. The country’s sugar industry has a single marketing desk at brown sugar level, administered by Zimbabwe Sugar Sales (Private) Limited (ZSS).

Mr Dube noted that the company’s share of total industry sugar sales volume for the quarter under review at 98 718 tonnes was 52 percent above the 98 572 tonnes achieved in the same quarter in 2020.

He highlighted that sugar industry export sales for the quarter reduced by 66 percent to 10 873 tonnes as sales were maximised in the local market.

“The Kenya market, a key regional deficit market, continues to be characterised by periodic temporary import restrictions, which the industry closely monitors and responds to by supplying other deficit markets,” he said.

This comes as Kenya has reportedly condemned and set to destroy 20 000 tonnes of Zimbabwean brown sugar worth over US$12 million that has been lying at the Kilindini customs warehouse in Mombasa for three years.

Mr Dube said that price realisations on the export markets were 9 percent higher than the same period prior year.

During the period under review, Mr Dube said cane deliveries from the Company’s plantations and private farmers in particular were above the same period prior year having benefited from prior year carryover cane and an earlier start to the harvesting season which began on April 20, 2021.

“The early season start will in the long term reposition the crop and prevent the previously experienced disruptive impact of harvesting during wet spells in December. Consequently, sugar production for the quarter under review increased from the same period prior year with a satisfactory factory performance, following a successful crop maintenance program,” Mr Dube said.

He noted that expansion works on the 4 000 hectares cane development project (Project Kilimanjaro) remained suspended due to delays in concluding funding arrangements with -financial institutions pending further clarity on land tenure, both of which are being progressed.

Mr Dube said the project, which is being undertaken by Tongaat Hulett Zimbabwe in partnership with government and local banks, has seen a total of 2 700 hectares of virgin land being bush cleared and ripped and 562 hectares planted to sugarcane in prior years.