ZIMBABWE – Tongaat Hullet, Zimbabwe’s sole sugar miller, has issued a notice to its contracted farmers informing them of its inability to pay their August dues as it is struggling to mobilize sufficient funds.

According to sources close to the miller, signs of distress came into play last week when the miller decided to postpone payment for August cane deliveries by farmers and other players due to a cash crunch because of depressed sales occasioned by stiff competition from cheap imports.

In a statement sent to the Zimbabwe Sugar Sales (ZSS) board members, Ms Tracey Mutavari, the company’s general manager, brought to light the company’s struggle to sell its current sugar stocks.

As a result of depressed local sales, stocks are building up and if the current trends persist to March 2024, stocks will potentially close at 94000 tonnes by March 31, 2024, which will be 64,000 tonnes than the planned closing stock of 30,000 tonnes,” Ms Mutavari revealed.

She further noted, “High closing stock will delay the closure of the 2023/24 season and continue to pose liquidity challenges for the MCP and farmers as cash will be tied to stocks for a longer period of time.”

As the flooding of the local market with cheap sugar continues, the future of more than 1300 commercial farmers who benefitted through the land reform program is now at risk.

This has prompted the cane farmer’s association and industry officials to raise alarm in view that there is a need for authorities to intervene urgently before the local sugar industry collapses.

Mr. Saul Chin’anga, Zimbabwe Sugarcane Development Authority spokesman remains perplexed about the situation.

While the rationale of the sugar imports was to stabilize local prices, both the imported sugar and local sugar prices are now the same.

We understand that the intention of bringing in the sugar imports was to stabilize prices. However, we have also observed that the price of imported sugar is now the same as the locally produced commodity and since the local prices have stabilized there is no more need for these imports.”

He further laments on the possibility of the local consumers consuming non-fortified cheap import sugars being exposed to a health risk.

From a health point of view, the cheap sugar imports will pose a serious health risk to local consumers because that is sugar not fortified and we hope the Consumer Council of Zimbabwe (CCZ) and the Ministry of Health and Child Care will enforce the relevant laws to ensure that the local consumer is protected.”

If the situation is not reversed, sugar players project that local producers may be stuck with up to 100, 000 tonnes of sugar by March next year, a move which will significantly impact their ability to meet their financial obligations.