Zim sugar sector reports dip in production

Audrey Galawu

The sugar sector reported 396 541 metric tons of actual performance for the 2022/23 farming season against a production capacity target of 414 000 metric tons which represents a 4% variance below the target.

According to the National Competitiveness Competition progress report, the sector failed to meet the set target due to several challenges including the cost of borrowing which has reportedly remained very high despite interventions of reducing interest per annum from 200% in 2022 to 150% in 2023 to avoid speculative tendencies.

Exchange rate distortions are continuously affecting the sector, although there are some measures that are being undertaken by the Government to address the local currency volatility.

“The auction system has been refined to follow Dutch Auction tenets and also authorised financial dealers are now allowed to bid for forex for onward selling to clients and there is no ceiling on the margin.

“The poor quality of sugarcane, which was caused by unreliable supply of utilities; attack of the sugarcane crop by pests negatively affected yield.

“To mitigate against huge losses, out-growers resorted to the use of knapsacks, however, there are efforts to use drones in the application of pesticides.

“High cost of electricity and water; farmers are being encouraged to purchase water meters and be calibrated by Zimbabwe National Water Authority,” reads the report.

These challenges faced by the farmers will have a negative impact on yield and investment in the next farming season.

The NCC added that the sector is facing competition from the non-fortified sugar imports where permits to import approximately 23000t of sugar were issued.

The challenges necessitated the industry to continuously increase the price of sugar and its related products compared to comparator countries such as Zambia.