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Tawanda Mangoma in Chiredzi
Sugarcane miller, Tongaat Hulett Zimbabwe, has said there is a low uptake of sugar on the local market, which is straining one of the country’s vibrant industries.

The development follows requests from various farmer organisations for a balance of 15 percent retained on the sale of every tonne of sugar without deducting any dues. In a letter dated December 7 this year, which was jointly signed by THZ finance director (Hippo Valley Estate Limited) Mr John Chibwe and Mr Shelton Nhari of Triangle Limited, the miller said it could only afford to pay the farmers 7,5 percent.

“We wish to note that the request by the associations come at a time when the industry is experiencing severe liquidity constrains characterising the local market,” read the letter.

“At the back of this, the millers have to pay $374 per tonne to farmers, which is 85 percent of the current Mill Door Price (MDP) of $571,61 per tonne at the DOP ration of 77 percent.” Tongaat Hulett said the poor uptake of sugar in the local market had a negative impact on the industry.

“Of note also is that a total of 136 694 tonnes was still on hand as at 30 November, 2017 and projections to end of the marketing season, 31 March, 2018, indicate that 67 405 tonnes would still be unsold as at that date,” the letter read. Tongaat Hulett promised additional payments of $33 per tonne, which would see deductions of debts being affected.

“The miller will pay an additional $33 per tonne as advance payment to farmers, which translates to 7,5 percent of the current MDP of $571,61 net of the (23 percent DOP) milling charge,” said Tongaat.

“This will bring the advance payment pending disposal of the entire 2017 /18 crop to approximately $184 per tonne. On your request for waiver of deductions on the debts owed by farmers to the respective millers, this has not been granted.” Tongaat Hulett further said it would consider individual cases and taking into account the farmer’s circumstances. The company is owed more that $10 million dollars by farmers after it over paid them since 2014 due to DOP issues.