ZIMBABWE – Hippo Valley Estates Limited, a key player in Zimbabwe’s sugar industry, has reported a remarkable 68 percent increase in export sales, reaching 67,527 tonnes in 2023 compared to 40,246 tonnes in the previous year, defying adverse climatic conditions.  

According to the sugar estate, the surge in export figures was achieved by redirecting displaced local market volume to exports, ensuring sustained operations. 

In a trading update for the third quarter ending December 31, 2023, Canaan Dube, Chairman of Hippo Valley Estates, acknowledged the challenges faced by the company during the period while highlighting their ability to maintain a steady sugar production. 

Dube explained, “At the end of the crushing season, Hippo Valley Estates produced 194,684 tonnes of sugar, trailing behind the previous year’s figures. The decrease in production was primarily due to lower yields and a shortage of critical spare parts, resulting in unscheduled mill stoppages and reduced plant reliability.” 

Despite the production challenges, the company operated in a difficult business environment marked by significant inflationary pressures, exchange rate volatility, and constrained Zimbabwe Dollar (ZWL) and United States Dollar (USD) liquidity.  

The official exchange rate to the ZWL devalued by 556 percent from ZWL930:US$1 at the beginning of the year to ZWL6,105:US$1 at the end of December 2023, negatively impacting financial performance. 

Dube also highlighted additional fiscal policy measures in the third quarter, including more aggressive corporate taxes effective January 1, 2024, which increased the cost of doing business for the entire economy. 

Despite these challenges, the quality of the cane harvested by Hippo Valley Estates remained above prior recovery efficiencies.  

The estimated recoverable crystals in sugarcane and the cane-to-sugar ratio surpassed the previous year’s figures, indicating higher sugar content and improved recovery efficiencies. 

Zimbabwe Sugar Sales Limited (ZSS), the sole marketing desk for raw and brown sugar produced by the Zimbabwe Sugar Industry, reported a total industry sugar sales volume of 295,382 tonnes for the nine months leading up to December 31, 2023.  

Hippo Valley Estates accounted for 52.54 percent of the total sales volume. However, domestic market sales decreased by 18 percent compared to the same period in the previous year, attributed to duty-free sugar imports following Statutory Instrument (SI) 80 of 2023. 

The strategic focus for Hippo Valley Estates remains on improving yields, ensuring plant reliability, maximizing capacity utilization, and achieving sustainable operating cost efficiencies in the medium to long term.  

In the short term, the sugar estate is prioritizing the successful completion of the off-crop program, aiming for an efficient and reliable milling campaign in the 2024/25 season. 

Additionally, the industry anticipates improved domestic sales volumes following the recent repeal of Statutory Instrument 80 of 2023, effective January 1, 2024, although immediate benefits may be hindered by high stocks of imported sugar in the market. 

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