Cheap imports wreak havoc on local sugar industry
George Maponga in Masvingo
Cheap sugar imports into the country are wreaking havoc in the local sucrose industry amid fears Zimbabwe will be stuck with nearly 100 000 tonnes of locally-produced sugar by March next year unless imports are curbed.
Influx of cheap sugar imports after lifting of duty on products such as sugar by Government is spelling disaster for the local industry threatening the viability of more 1300 commercial outgrower farmers and over 20 000 workers employed by Tongaat Huletts that runs sugar mills and plantations at Hippo Valley and Triangle estates.
The proliferation of cheap imports have precipitated a severe cash squeeze in the local industry resulting in Tongaat staying and delaying payment for cane deliveries to farmers that were due on 15 September.
In a notice to farmers, Tongaat said it was struggling to mobilise sufficient funds to pay for August cane deliveries because of depressed local sugar sales.
There are fears the situation could worsen as the year progresses, a development that may collapse the local sugar industry, leaving farmers and millers in the red.
In a cane proceeds statement to the Zimbabwe Sugar Sales(ZSS) board members dated September 11, the company’s General manager Ms Tracey Mutaviri painted a gloomy picture on the state of local sugar sales.
“As a result of depressed local sales, stock has been building up and if the current trend persists to March 2024, stocks will potentially close at 94 000 tonnes by March 31, 2024 which will be 64 000 tonnes more from the planned closing stock of 30 000 tonnes. High closing stock will delay closure of the 2023/24 season and continue to pose liquidity challenges for both MCP and farmers as cash will be tied in stocks for a longer period,” she said.
The Zimbabwe Sugarcane Development Association spokesperson Mr Saul Chin’anga lamented that while the rationale of sugar imports was to stabilise local prices what was shocking was that the price of both imported and local sugar was now the same.