Hippo confident of sector increase in sugar output
Enacy Mapakame-Business Reporter
Hippo Valley says Zimbabwe’s sugar producers have significant potential to increase yields in cane production leveraging on new varieties, improved farming practices and mechanisation.
This also comes as the sector is confident about getting adequate water for irrigation as Tugwi- Mukosi and Mtirikwi dams – used to irrigate sugarcane plantations in the Lowveld – are close to full capacity. As such, producers are set to accelerate opportunities for horizontal expansion through new sugarcane projects.
The significant water resource is expected to benefit mainly the new farmers who are keen to take advantage of existing excess capacity to supply the cane to the processing mills.
Zimbabwe’s biggest sugar processor – Hippo Valley Estates Limited chief executive officer Aiden Mhere said water supply to the Mkwasine Out-Growers was however currently constrained on account of challenges on the Siya-Manjirenji system, but efforts were already being made to attend to the issue.
Now the industry is also banking on technical support from Hippo and Zimbabwe Sugarcane Experiment and Research Station (ZSAES) to replant programmes among others, which is expected to benefit especially new farmers and boost yields.
“The resultant increase in cane supply to the mills should improve operating efficiencies and cost competitiveness. The current crop is projected to yield more than the prior season following improved irrigation regimes, repairs to pumping installations and proactive initiatives to contain the yellow sugarcane aphid discovered in the region,” said Mr Mhere.
During the financial year 2022, total sugar industry sales volume went down to 394 000 tonnes compared to 440 000 tons achieved in the prior year. Hippo accounted for 53,2 percent which was an improvement from 50 percent contribution in 2021.
Total industry sugar sales into the domestic market for the year at 356 000 tons were 10 percent above prior years’ 325 000 tons driven by strong domestic demand. Industry export sales however, decreased by 67 percent to 38 000 tons following redirection of supply to the local market in view of the increased demand.
Mr Mhere said price realisations on the local market also remained firm in current purchasing power terms. While local market US dollar sales were firm at the beginning of the year, these subsequently slowed down owing to limited availability of foreign currency within the economy.
Meanwhile, Mr Mhere added the sugar industry is engaging authorities to ensure an even competitive playing field against cheap imports of sugar originating from surplus producers who enjoy duty protection in their host countries.
This also comes as the operating and trading conditions are likely to remain challenging in the current milling season, with farmers and millers contending with high cost pressures on account of both local and global inflationary dynamics, exchange rate volatilities, high cost of funding and supply chain bottlenecks, resulting in pricing of local products di‑cult in the short to medium terms.
“It is also pleasing to note that the authorities are open to engagements with the industry on the key issues of duty-free imports of sugar and appropriate pricing models to ensure that the industry remains viable whilst protecting consumers,” said Mr Mhere.