ZIMBABWE’S largest sugar producer, Tongaat Hullet (Tongaat), recorded a 11 percent decrease in sugar production for the year ended March 31, 2020 owing to a decline in the volume and quality of cane, the Daily News reports.
In a statement accompanying the group’s abridged audited financial results, Tongaat indicated that a total of 212 000 tonnes of sugar were produced this year compared to 239 000 tonnes produced in the previous year, while 1 686 000 tonnes of cane were crushed compared to last year’s 1 862 000.
“While the high incidence of yellow sugarcane aphids experienced in the region negatively impacted cane quality, robust crop management practices to contain the pest are being successfully implemented
“Cane ploughing and replanting programmes aimed at restoring yields to optimal levels continued during the year, with some 690 hectares (2019:1 670) having been planted,” read the statement.
The statement indicated that the company’s total revenue for the year amounted to $3,7 billion compared to last year’s $2,5 billion, a 48 percent increase despite a 14 percent decrease in sales.
The sugar producer further said the country’s worsening economic conditions had slowed work on the
4 000 hectares out-grower cane development project, with 2 700 hectares of virgin land having been cleared and ripped and 400 hectares planted.
The project was launched in November last year by President Emmerson Mnangagwa to end fights between Tongaat Hulett, chiefs in the Masvingo Province and local communities over land.
“Work on the project (Kilimanjaro) is being slowed down by delays in obtaining adequate funding from financial institutions due to the prevailing adverse economic environment. Alternative funding structures for the project are under consideration which will result in the project being progressed on a phased approach.
“On completion, project Kilimanjaro will contribute significantly to the industry target of full utilisation of installed milling capacity of
600 000 tonnes of sugar by 2023/24, positioning the country to be one of the most competitive sugar producers in the region and globally,” the statement further read.
The statement added that while coronavirus had affected many businesses, Tongaat was unlikely to be impacted by the pandemic as sugar demand has remained stable.
“Monetary policy uncertainty continues to perpetuate the economic ills of reduced disposable incomes, foreign currency shortages, high interest rates, distorted exchange rates, and a hyperinflationary local currency. Demand for sugar, being a staple commodity, will continue to be stable.
“Sugar pricing strategies will therefore be aimed at balancing value preservation for the company, consumer affordability and discouraging arbitrage opportunities,” the statement said.