Zimbabwe sugar cane farmers get backing from commercial bank CABS, avails US$2m financing facility

ZIMBABWE – Zimbabwean commercial bank, CABS has availed a US$2 million financing facility to support sugar cane farmers in the country increase production.

According to reports by The Herald, the war-chest is ample to rehabilitate over 1 000 hectares of cane fields to push up yields.

Working capital constraints have been one of the key stumbling blocks to efforts by commercial cane farmers to increase yields resulting in depressed output.

Zimbabwe earns more than US$70 million annually from sugar exports and increasing yields and the area under cane will boost its capacity.

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Sugar producer, Tongaat Hulett’s Zimbabwe managing director Mr Aiden Mhere noted that ramping up yield was key in ensuring viability by commercial cane farmers.

“CABS has a US$2million facility aimed at assisting struggling farmers to increase their yields through rehabilitation of their fields among other interventions that are affected by shortage of working capital.

Zimbabwe’s sugar production is expected to increase by 4 percent to 460,000 MT in the 2020/21 MY

USDA

“The bank inked the facility with us and interested farmers can come forward and get assistance. The money is enough to cover about 1100ha,” said Mr Mhere.

The move by the financial institution comes as other local banks such as CBZ, FBC and ZB are also financing the US$40 million Kilimanjaro Sugar Cane project in partnership with Tongaat which seeks to ramp up aggregate national sucrose output by opening new cane fields.

The project will open up over 3, 000 hectares of virgin land from the company into cane fields.

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.

In terms of operations, Tongaat Hulett’s overall cane deliveries from its plantations and private farmers, in the 10 months period to December 31, 2020, trailed the prior year due to the impact of irrigation power challenges as well as the dry spell experienced during the 2019/20 peak growing period of October to March.

During the 10 months period, the company harvested 1 043 774 tonnes of cane, which was three percent lower than the comparable period in 2019.

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In the same period last year, the sugar producer said private farmers harvested 592 722 tonnes reflecting a 14 percent decrease from the prior comparable period in 2019.

The firm said steps were being taken during the current off crop period to rehabilitate the mill, to ensure improved performance in the 2021/22 production year, while solar projects to augment electricity at critical water pumping installations, have been initiated.

According to a Global Agricultural Information Network (GAIN) report from the US Department of Agriculture (USDA), Zimbabwe’s sugar production is expected to increase by 4 percent to 460,000 MT in the 2020/21 MY.

The rise will be due to an increase in the quantity of sugarcane delivered to the mills, improved sugar cane quality, and improved sugar mill efficiencies.

The report forecasts that sugar exports will decrease marginally by 1 percent to 104,000 MT in the 2020/21 MY, based on the projected impact of Covid-19 on demand and global supply chains especially during the first months of the season.

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