Golden Sibanda Senior Business Reporter
Zimbabwe’s sugar exports are forecast to increase by 21 percent to 145 000 tonnes in 2019, from 120 000 tonnes last year on the back of increased production and large carryover stocks.
The 2017/18 exports were revised downwards to 120 000 tonnes based on the lower than expected sugar production and updated industry data, according to the Global Information Network Report produced by the United States Foreign Agriculture Service.
The main export destinations for Zimbabwe’s sugar are the United States, European Union, Botswana, South Africa and Eastern Africa (Kenya). Zimbabwe exported about 17 443 tonnes of raw sugar to the United States to fulfil the 2017/18 Tariff Rate Quotas (TRQ).
The United States allows duty free access for Zimbabwe sugar under the Tariff Rate Quota (TRQ) programme. The total TRQ and re-allocations offered to Zimbabwe average about 12 000 to 14 000 tonnes annually.
The Southern African country usually fully utilises its sugar quota as the United States market remains attractive compared to other markets such as the EU.
Zimbabwe exports to the European Union (EU) have significantly decreased since 2017, due to unfavourable prices and low returns when compared to other export markets such as East Africa.
The EU changed its domestic sugar policy in 2017 and removed restrictions for domestic sugar beet production. This change is expected to result in an increase in sugar supply and decreases in sugar prices in the EU.
It is also expected that the change in policy will result in a decrease in EU imports from other countries over time.
On the other hand, sugar imports will decrease by 12 percent to 38 000 tonnes in the 2018/19, from 43 000 in the 2017/18. This is due to the adequate sugar supply in the domestic market, and the only imports will be from South Africa and Swaziland who enjoy duty free access into the Zimbabwe market.
Sugar consumption in Zimbabwe is projected to increase by 5 percent to 345 000 tonnes in 2018/19 due to an increase in production, improved market access in the remote areas of the country and the increased uptake from beverage and food manufacturers.
Sugar cane in Zimbabwe is grown under canal irrigation system in the lowveld area of Triangle and Hippo Valley, in the Chiredzi District, Masvingo Province.
About 80 percent of Zimbabwe`s sugar cane crop is produced by two large estates, Triangle Sugar and Hippo Valley. Private farmers, including large scale farmers and the newly resettled farmers, produce an estimated 20 percent of the country’s sugar cane.
There are two sugar mills in Zimbabwe, the Hippo Valley Estates Ltd and Triangle Sugar Estates Ltd, with a combined sugar production capacity of about 640 000 tonnes and installed milling capacity of 4,8 million tonnes of sugar cane per annum.