Mozambican subsidiary of Illovo Sugar in need of US$100m to recover from flood destructions
MOZAMBIQUE – Maragra Sugar Company, a Mozambican producer of raw and brown sugar, requires at least an investment of US$100 million to help it recover from the destructions caused by flooding in February.
The company estimates that it lost 3.6 billion meticais (US$56 million) and 470,000 tonnes of cane in the production fields, corresponding to a value of 1.6 billion meticais, due to the flooding.
Maputo daily “Notícias” quotes the company’s Director-General, Filipe Raposo, saying that the damage hinders the functioning of the irrigation system, and it makes it difficult to plan for cane production.
“The flooding also damaged the electricity and drainage systems, as well as other equipment needed for cane processing”, Raposo noted. “Taking into account the work carried out so far, we know what is necessary to resume production.”
The Director-General explained that the work to restore the pumping station only started a month ago, due to the difficulties faced in reaching certain regions of the cane fields.
Illovo, the owner of Maragra and one of the world’s largest sugar companies, points out on its website that its subsidiary produces approximately 80000 tons of sugar per annum.
According to News Central TV, a local media house, Açucareira de Xinavane, the largest sugar mill in Mozambique and a subsidiary of Tongaat Hulett, had also ceased sugar exports for the last two months to March following flooding in its cane plantations with no current information if it resumed operations.
At the time, an official from the company stated that this suspension would ensure the availability of sugar in the local market.
The sugar mill also cited difficulties in transporting sugar via rail to the port of Maputo as the Limpopo line is currently not operational.
The Xinavane area has lost approximately 2,000 hectares of sugar cane, some of which belonged to small-scale farmers.
The company produces around 340,000 tonnes of sugar annually, including 90,000 tonnes of white refined sugar, with 10,000 of it exported to European markets.
During the stoppage of operations by the millers, economists forecasted sugar shortages and said the increase in raw sugar prices would be a contributing factor to the looming shortage. “Prices will increase astronomically,” said economist Malvin Chidembo.
The highest price for local brown sugar in June 2023 was observed in Zambezia (83 Mt/Kg) and the lowest (73 Mt/Kg) in Niassa province, per data from the UN World Food Programme (WFP).
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