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Sweet times roll for sugar industry

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DESPITE low disposable income, strong demand from the domestic market saw 31% growth in local sugar sales for the first quarter to 30 June 2021.

Sugar processor Hippo Valley Estates chief executive officer, revealed that total industry sales volumes for the domestic market totalled 86 843 tonnes for the quarter under review compared to 66 492 tonnes recorded during the corresponding period last year.

Of the local sugar industry’s total sales volume of 98 718 tonnes, Hippo accounted for 52.1%, an increase from the 47.9% achieved in the prior year’s comparable period.

The Zimbabwe sugar industry has a single marketing desk at brown sugar level, administered by Zimbabwe Sugar Sales (Private) Limited (ZSS).

“Total industry sugar sales into the domestic market for the quarter at 86 843 tonnes (2020: 66 492 tonnes) were 31% above same period prior year due to a combination of strong demand and the non-repeat of supply containment measures implemented in 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,” said Mhere.

Although demand was strong on the domestic market, export sales for the quarter declined by 66% to 10 873 tonnes compared to 32 080 tonnes in the comparable prior year period as sales were maximised in the local market.

Kenya, 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.

Price realisations on the export markets were 9% higher than in the corresponding period the previous year. Total industry sugar production for the period rose 27% to 128 044 tonnes from 101 063 tonnes produced during the same period last year.

At Hippo, sugar production jumped 35% to 66 664 tonnes while total cane milled rose 34% to 554 833 tonnes.

Cane deliveries from the company’s plantations and private farmers were above same period prior year, having benefited from prior year carryover cane and an earlier start to the harvesting season, which began on 20 April, whereas harvesting began on 5 May last year.

Cane harvested by private farmers nearly doubled to 270 024 tonnes from 139 297 tonnes.

While the sugar industry as a whole has not been significantly impacted by the Covid-19 pandemic as an essential service provider, Hippo has indicated it will continue to focus on mitigating supply chain disruptions. To date, the sugar processor has managed to meet domestic sugar demand as well as fulfill export commitments.

“Marketing is focused on maximising supply to the local market with residual stocks being allocated to regional and international premium markets to generate foreign currency for the company and the country,” said Mhere.

Overall, prospects are high as the Lowveld dams hold sufficient stored water for approximately three seasons of irrigation at normal water usage, following a satisfactory rainy season.

Additionally, the milling season commenced on schedule and is progressing satisfactorily.

“Barring unforeseen circumstances for the balance of the harvest season which is almost halfway through, industry sugar production for the current season is forecast at levels similar to last year,’” said Mhere.—STAFF WRITER

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