21 February 2008

Zimbabwe: Massive Sugar Shortage Looms

Harare — A SERIOUS shortage of sugar is looming after the country's producers were last week forced to halt production due to crippling shortages of sugarcane and coal.

Industry sources told The Financial Gazette that Hippo Valley and Zimbabwe Sugar Refineries (ZSR), the country's major producers of sugar, had exhausted their supplies of sugarcane and were now waiting for fresh supplies from the next harvest, which would be after April.

The shortages of sugarcane are believed to have worsened an already precarious situation as companies had been battling acute power shortages, foreign currency and spares supply constraints.

Sources said milling companies had put aside substantial buffer stocks to use during the time of shortages. But reports said the government, worried about annoying the electorate ahead of next month's polls, had ordered the firms to produce sugar from their buffer stocks, leading to the depletion of stocks.

starafricacorporation chief executive officer Patterson Sithole said he was not aware of the disruptions when contacted for comment.

The former Confederation of Zimbabwe Industries president was not even willing to shed light on the extent of the production deficit in the industry.

He said: "We supply only part of the market, I do not have that information."

ZSR is a subsidiary of starafricacorporation, which listed on the Zimbabwe Stock Exchange in 1947.

Hippo Valley executives were not immediately contactable for comment.

A source said production could resume this week if coal supplies were restored, although this was not guaranteed.

Despite the unavailability of sugar on the domestic market, some unscrupulous merchants have however, been managing to secure the commodity but have been selling it outside the country to earn foreign currency.

Sugar shortages in Zimbabwe could force the country to revert to expensive imports. This would divert foreign currency, which could have been utilised in improving productivity by importing spares, into importing basic food commodities.

The current sugar production constraints have also been blamed on the failure by new farmers to produce on land they took up from white commercial farmers in 2000.

Close to 180 new farmers were said to have settled on the Hippo Valley Estates and were allocated hacterages of between 20 and 60 per family.

Many of the resettled farmers had initially celebrated bumper harvests from crops grown by former landowners, but these have since disappeared from the sugarcane fields.

Besides, the new farmers have struggled to harvest the crop due to lack of expertise and implements and working capital, among other things.

According to the Zimbabwe Cane Farmers Association, 772 739 metric tonnes of sugarcane were produced before the seizure of farms in 2002.

The land reform had resulted in a 440 percent decrease in hacterage, significantly affecting output, which went down to 148 723 metric tonnes in 2004 and 219 100 metric tonnes in 2005.

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