Duty-free imports strain Hippo Valley sugar sales

**Hippo Valley Estates CEO, Aiden Mhere**

Audrey Galawu

Hippo Valley Estates recorded a share of the total industry sugar sales volume of 295 382 tons compared to 318 352 in 2022.

Total industry sugar sales into the domestic market for the same period amounted to 227 855 tons which is 18% below the prior year, which was 278 106 tons.

In its report for the period ended December 31, 2023, Hippo Valley Estates CEO, Aiden Mhere attributed the decrease in sugar sales to the duty-free sugar imports from the region, which came into the local market following the promulgation of Statutory Instrument 80 of 2023.

“Coming from softer currency economies, regional exporters to Zimbabwe capitalised on the multi-currency trading regime in Zimbabwe and the removal of import duties.

“The industry implemented aggressive but costly initiatives to defend market share against duty-free imports during the period under review, resulting in reduced net realisations.

However, the upward revision of the foreign currency retention ratio on local USD sales to 100% helped in cushioning the local market revenue drop,” he said.

Export sales volumes increased by 68% to 67 527 tons from 40 246 tons in 2022 as the displaced local market volume was redirected to the export markets in order to generate the much-needed working capital to sustain operations.

Revenue realised at the end of the third quarter grew by 77% to ZWL$977.7 billion from ZWL$551.9 billion recorded during the same period last year on the back of price adjustments in response to hyperinflationary pressures.

However, Hippo Valley highlighted that the increase in revenue was not sufficient to offset the increased costs of business, particularly in respect of manpower costs.

Total sugar produced by the company at the end of the third quarter, which marks the end of the crushing season amounted to 194 684 tons, down by 6% due to a drop in yields and unfavourable weather conditions.