Sugar exports in sharp decline

A sugar cane estate worker monitors the irrigation system

SUGAR exports from Zimbabwe to the United States and regional markets declined 62 percent in the year ended March 2018, due to decreased production and increased local demand, industry giant Tongaat Hulett has reported.

South Africa’s Tongaat Hulett dominates Zimbabwe’s sugar production through its wholly-owned Triangle estates and the listed Hippo Valley, in which it has a controlling 50.3 percent stake.

Total industry exports in the year to March 2018 fell to 58,000 tonnes from 153,000 tonnes previously, Tongaat said in the Hippo Valley results report for the 2018 financial year.

Hippo’s sugar production declined 14 percent to 197,000 tonnes in the 2018 financial year, as low dam levels during peak growing periods limited irrigation.

There was, however, an 11 percent increase in total local industry sales, as government regulations progressively throttle imports. The Coca Cola Company’s increased off-take from the local market also raised demand.

Zimbabwe contributes the bulk of Tongaat Hulett’s total raw sugar production

A favourable sales mix achieved in the domestic market resulted in an 8 percent jump in the average mill door price, to $626 per tonne, from $578, previously.

Normal growing conditions and increased capacity in the recently commissioned Tugwi-Mukosi dam should see total industry production rebound to the 433,000-483,000 tonne range in the 2018/19 season, from the estimated 421,000-440,000 tonnes in the 2017/18 season.

Output is seen reaching 560,000 tonnes by 2019/20. The industry has capacity to mill 640,000 tonnes per year.

The Zimbabwe operations’ importance to Tongaat’s operations has been restored in recent years, after land reform-related upheavals as well as the country’s broader economic turmoil.

Since 2015/16, Zimbabwe has produced more raw sugar than any of the Tongaat group’s operations in South Africa, Swaziland and Mozambique.

Zimbabwe’s peak sugar output was achieved in 2003/4, when the country produced 578,000 tonnes.

 

 

 

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