Government of Zimbabwe, Tongaat Hulett to launch US$40m sugar cane project

ZIMBABWE – The Kilimanjaro sugar cane project in South-East Zimbabwe worth US$40m is ready to be commissioned by the Government of Zimbabwe in partnership with Tongaat Hulett Zimbabwe, an agribusiness company.

The project will open up over 3, 000 hectares of virgin land from Tongaat Hulett into cane fields, which has already started and is expected to be completed by September next year.

The fields will be handed over to Government for allocation to indigenous out-grower farmers on a cost recovery basis which is expected to increase sugar output earning the country more foreign currency.

Zimbabwe projects sugar exports in 2019 to increase by 21% to 145 000 tonnes up from 120 000 tonnes exported 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 especially Kenya.

Zimbabwe exported about 17 443 tonnes of raw sugar to the United States to fulfill 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.

Zimbabwe 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.

Increased sugar production is also expected to push imports down by 12 percent to 38 000 tonnes in the 2018/19, from 43 000 in the 2017/18.

The only major imports are projected to be from South Africa and Swaziland, who enjoy duty free access into the Zimbabwe market.

At the same time, sugar consumption in Zimbabwe is projected to increase by 5 percent to 345 000 tonnes in 2018/19 supported by improved market access in the remote areas of the country and the increased uptake from beverage and food manufacturers.