By Stanley James Business Editor
ZIMBABWE’S sugar industry has emerged as a key player in the country’s economic growth after an upward trend in export receipts to over US$75 million per year.
The sugar value chain analysis report presented this Thursday by the National Competitiveness Commission Chief Economist, Mr Dumisani Sibanda, shows that despite falling sugar cane yields, exports for the commodity continue on an upward trend.
“Ironically, despite the falling sugar yield, Zimbabwe’s sugar exports are on an upward trend increasing by about 30 percent from US$58,1 million in 2016 to over US$75 million. The trade statistics show that if sugar productivity challenges are addressed, there is potential for the country to export more, as locally produced sugar becomes more competitive,” Sibanda said.
For players in the sugar value chain, it is all about further growth in productivity that matters.
“The industry remains viable however there are still many challenges that need to be addressed if there is that need to enhance viability and sustain operations, thereby allowing more players to join the lucrative sector,” said Elisha Tamirepi, Chairperson of the Zimbabwe Sugar Developers Association.
“High costs, high interest rates, uncertainty on the economic environment are key challenges that need to be resolved if we are to see more gains within the entire value chain thereby enabling the sector to reap more benefits,” Mkwasine Sugarcane Growers Association Member, Dennis Masomere noted.
Tracy Mutaviri, Zimbabwe Sugar Association Secretary General said: “The Government should eliminate exchange rate distortions through availing more foreign currency to the highest bidders on the auction markets, while macroeconomic stability is key to the growth of the entire value chain.”
Findings of the report also show that the competitiveness of the sugar value chain is being adversely affected by macro-economic constraints such as exchange rate disparity between the auction and the parallel markets, hard currency limitations, inflationary pressures, high costs of borrowings and utilities, among others.
The report also revealed that 65 percent of sugar produced in Zimbabwe is for the domestic market and 35 percent is exported into the region, the USA and to the European Union as raw sugar.
On the domestic front, the findings show that the sugar industry is currently meeting 85 percent and 100 percent of the local requirements for refined sugar and brown sugar respectively.
The major consumers of sugar in Zimbabwe, according to the report are food sectors, beverages, pharmaceuticals, hospitality, confectionary sector as well as households.
It therefore recommended the Government to focus on macro-economic stability measures to address constraints facing the entire value chain.
According to the report findings, Zimbabwe is ranked ninth in Africa and fourth in SADC, in terms of sugar cane yields after Malawi, Zambia and Eswatini.