In Zimbabwe, the sugar industry is facing a crisis of unprecedented proportions, one that threatens the livelihoods of thousands and puts the nation’s economy at risk. The surge in cheap sugar imports has triggered alarm bells within the local sugar sector, raising concerns that the country could soon be saddled with an excess of nearly 100,000 tonnes of domestically manufactured sugar by March, a situation that could spell disaster unless swift actions are taken to curb imports.
The Import Quandary: This alarming surge in cheap sugar imports can be traced back to the government’s decision to lift duties on sugar products, a move that initially aimed to stabilize local prices but has since had dire consequences for the local sugar industry. The imported sugar, predominantly originating from Zambia, Malawi, and Mozambique, now competes directly with sugar produced locally by Tongaat Hulett Zimbabwe, which operates at the Triangle and Hippo Valley estates.
Unsettled Futures: The ramifications of this influx of inexpensive imports are deeply concerning. Over 1,300 commercial out-grower farmers and more than 20,000 workers employed by Tongaat Huletts, responsible for sugar mills and plantations at Hippo Valley and Triangle estates, are now facing an uncertain future. The rapid proliferation of these imports has also plunged the local sugar industry into a severe cash crunch.
Economic Implications: As a direct consequence of this crisis, Tongaat Huletts has been forced to postpone payments to cane farmers, originally scheduled for September 15, 2023. The company cites the downturn in local sugar sales as the primary reason for this delay. The situation could deteriorate further, potentially leading to the collapse of the entire local sugar industry. Such a collapse would not only cripple farmers and millers financially but also cast a dark shadow over the country’s economy as a whole.
A Bleak Outlook: In a recent communication to Zimbabwe Sugar Sales (ZSS) board members, Tracey Mutaviri, General Manager of Tongaat, painted a grim picture of the local sugar sales landscape. She revealed that if the current trend of depressed local sales continues until March 2024, stocks could potentially reach a staggering 94,000 tonnes by March 31, 2024. This is a staggering 64,000 tonnes more than the planned closing stock of 30,000 tonnes. High closing stock levels will exacerbate liquidity challenges for both MCP and farmers, as cash will be tied up in stocks for an extended period.
Rising Concerns: Saul Chin’anga, spokesperson for the Zimbabwe Sugarcane Development Association, pointed out that while the initial rationale behind sugar imports was to stabilize local prices, it is now startling to discover that the prices of both imported and locally-produced sugar are virtually identical. Zimbabwe has unwittingly become a dumping ground for lower-quality sugar from neighboring countries since the government opened the doors to imports and removed import duties on basic commodities earlier this year. Industry experts argue that the reasons for continued imports are fading, and urgent action is needed to safeguard the local sugar industry.
Conclusion: Zimbabwe’s sugar industry is at a crossroads, and decisive steps must be taken to protect the livelihoods of its people and the broader economy. As the government grapples with this pressing issue, the nation watches with bated breath, hoping for a swift resolution that will ensure the survival and prosperity of the local sugar sector.
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