Sugar is emerging as a key component of Zimbabwe’s economy, with export receipts topping US$75 million a year.
Dumisani Sibanda, Chief Economist for the National Competitiveness Commission, presented a report, on Thursday, on sugar value chain analysis which indicated that despite falling sugar cane yields, exports of the commodity continue to grow.
“Ironically, despite the falling sugar yield, Zimbabwe’s sugar exports are on an upward trend increasing by about 30 per cent from $58,1 million in 2016 to over $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.
Sugar value chain players must focus on productivity growth in order to continue to grow.
Elisha Tamirepi, Chairperson of the Zimbabwe Sugar Developers Association, said the sugar industry remains viable, but there are still many challenges to be addressed if there is the hope of enhancing the viability and maintaining operations, thus allowing more players to join the lucrative sector.
On his part, Mkwasine Sugarcane Growers Association member, Dennis Masomere, noted that high costs, high interest rates and uncertainty over the economic environment are challenges that need to be addressed to make gains within the entire value chain and allow the sector to reap more benefits.
The report also concludes that the sugar value chain is adversely affected by macroeconomic factors including exchange rate disparity, hard currency limitations, inflationary pressures, and high borrowing and utility costs.
The report also revealed that 65 per cent of sugar produced in Zimbabwe is for the domestic market and 35 per cent is exported into the region, the USA and to the European Union as raw sugar.
Currently, the sugar industry meets 85 per cent and 100 per cent of the local requirements for refined sugar and brown sugar, respectively.
According to the report, the main sugar consumers in Zimbabwe are the food sector, beverage industry, pharmaceutical industry, hospitality industry, confectionery sector, and households.
Consequently, it recommended that the government focus on macroeconomic stability measures to address the constraints facing the entire value chain.
In terms of sugar cane yields, Zimbabwe is ranked ninth in Africa and fourth in SADC, after Malawi, Zambia, and Eswatini.
