ZIMBABWE- Zimbabwe’s total industry sugar production for the 2023/24 season is forecast at 414 773 tons, according to Hippo Valley Estates, one of the country’s leading sugar millers.
According to the Zimbabwe Stock Exchange (ZSE) listed company, the forecast remains below the nameplate industry capacity of 600 000 tons, although it was a notable improvement from last year’s 396 682 tons.
Hippo Valley however assured that the industry was implementing both vertical (yield and quality improvements) and horizontal improvements (new developments) to improve capacity utilization.
In its earnings report, the miller said its revenue remained firm in the quarter to June 2023 despite volumes being weighed down by competition from duty-free imports towards the end of June.
Sugar is currently imported duty-free after the Government scrapped the duty to improve availability when prices of most goods in Zimbabwe shot beyond the reach of many due to currency depreciation.
Unhappy with the decision, producers claimed they lost roughly 5 percent of the domestic market share to imports considered grossly cheaper than local brands because they enjoy subsidies from their countries of origin.
Hippo is however happy to report that customers continued to support local brands for the better part of the first quarter although volume decline was evident in the last weeks of June 2023 as the impact of duty-free sugar imports set in.
“Various measures are being implemented to defend market share in the domestic market,” Hippo Valley assured in a statement.
“Current marketing initiatives remain focused on growing optimizing returns from both local and premium export sales”.
Local producers have also received the backing of Buy Zimbabwe (Buy Zim) which has raised alarm over seven cheap unfortified sugar brands being imported for sale in local retail shops in contravention of the law.
In a statement released earlier in July, Buy Zimbabwe said some of the non-compliant brands included: Ashna Golden Sugar, Sunshine Brown Sugar, Selati White Sugar, Splendid Brown Sugar, Flair Brown Sugar, Selati Sprinkle Joy Brown Sugar and Evergold Brown Sugar.
“As Buy Zimbabwe, we are urging the relevant authorities to take necessary action against the importation of these unfortified sugar brands as they fall short of the nutritional benefits,” said Buy Zim.
Hippo Valley however has its eyes beyond Zimbabwe as a strategy to continue delivering value to its shareholders.
“The local market remains pivotal for the industry,” Hippo Valley said. “Management prioritizes efficient fulfillment of commitments to existing regional and premium international markets for the generation of additional foreign currency to sustain the industry requirements for critical imports.”
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