Maputo — Mozambique's four operational sugar mills expect to produce about 295,000 tonnes of sugar this year, compared to the 243,860 tonnes produced in 2007, according to the general director of the Sugar Producers Association (APAMO), Joao Jeque.

The four sugar companies have already started the 2008 production campaign hoping to surpass the best record of the last 30 years. That was attained in 2005, when, thanks to favourable climatic conditions, 265,000 tonnes of sugar were produced.

Jeque told AIM that, according to APAMO's forecasts, the Xinavane and Maragra companies in Maputo province should produce 80,400 tonnes and 79,691 tonnes respectively. The Sena and Mafambisse companies, in the central province of Sofala, are set to produce 75,000 and 60,000 tonnes respectively.

The Mafambisse and Xinavane factories, owned by the South African Tongaat-Hullett group, are planning to expand their production areas. A Tongaat-Hullett source said that the idea behind the expansion is to take advantage of the European market in the context of the "Everything But Arms" initiative, which will allow poor countries to export all goods except weaponry to Europe free of duties or quotas.

It is estimated that this expansion will allow sugar production at the two Tongaat-Hulett mills to reach 177,000 tonnes a year by 2009.

The expansion of Tongaat-Hullet production is estimated to cost 189 million US dollars, 63 per cent of which is to be invested in modernizing and expanding the factory infrastructures. It is expected that this expansion will create about 5,000 new permanent and seasonal jobs in Xinavane, and another 2,500 in Mafambisse.

Of the 243,860 tonnes of sugar produced in 2007, Mozambique exported 93,754 tonnes to the European Union preferential markets and to the free market *where prices are much lower). This was a reduction of 45 per cent when compared with the 2006 exports.

The government reads this reduction as resulting from very low sales on the free market, and the cancellation of exports to the preferential market in the United States in 2007 because of the failure to meet the production targets.

Exports yielded about 45.9 million US dollars, 29 per cent less than in 2006.