Rains cheer sugar producers despite 8% production decline
Above-normal rainfall during the 2020/21 wet season will guarantee the sugar industry’s water security for the next three years, boosting production prospects after an 8% decline in output during the ten months to December 2020.
A trading update by Hippo Valley Estates, the country’s number two sugar producer after sister company Triangle Limited, shows Zimbabwe’s total sugar output at 408 260 tonnes over the period, down from 441 416 tonnes during the same period in 2019.
During that time, Hippo’s own production was 4% lower, at 204 094 tonnes.
Despite last year’s decline in output, attributed to interrupted irrigation power supplies and a dry spell during the peak growing period in 2019/20, Hippo is upbeat about the sugar industry’s prospects going forward.
“With Tugwi-Mukosi dam spilling for the first time since its commissioning in May 2017, and Lake Mutirikwi at over 60% of its capacity, 75% of the sugar industry’s irrigated cane area is adequately covered for at least three seasons,” Hippo said in the update.
“As a consequence, total industry sugar production for the 2021/22 production season is forecast to increase on the back of projected improvements in yields, cane quality and milling efficiencies.”
Exports grew 45% to 97 000 tonnes in the nine months to December 2020, despite a temporary import ban in Kenya, a key regional market for Zimbabwe’s sugar. Zimbabwe also has an annual export quota of 12 636 tonnes to the United States. Other export markets are South Africa, Botswana and the European Union.
Hippo said Project Kilimanjaro – a joint initiative involving the government, banks and the two major sugar producers to open up 4 000 hectares of new sugar cane fields – had been stalled by funding problems as well as concerns over land tenure.
Project Kilimanjaro would expand the country’s total sugar cane hectarage by about 8%. To date, some 2 700 hectares of the targeted land has been cleared up.
South Africa’s Tongaat Hullet, which wholly owns Triangle Limited, is a 50.35% shareholder in Hippo. Other Hippo shareholders are Anglo American (38%) and Britain’s Tate & Lyle.