16 February 2018

Zimbabwe: Molasses Shortage Looms

MOLASSES procurement by stockfeed manufacturers on the local market has tumbled from a peak of 1 474 metric tonnes per month in 2015 to 774 metric tonnes per month in 2017, it has emerged.

The bulk of the commodity is being consumed by competing industries, the ethanol blending and yeast manufacturing firms, businessdigest has learnt.

Molasses, a by-product of sugarcane, is a core ingredient in the manufacture of stockfeed as well as ethanol which is key in fuel blending.

Competing demand for molasses by various industries has had an adverse impact on the operations of stockfeed manufacturers, who are now contemplating importing the commodity.

The bulk of Zimbabwe's sugarcane is produced by Tongaat Hullet.

However, molasses produced from the Triangle mill, run by Tongaat Hullet, is reserved for fuel blending.

Molasses produced from the Hippo Valley Estates is ring-fenced for yeast manufacturing firms and the livestock industry.

Currently, Hippo Valley Estates is sitting on 1 000 metric tonnes of molasses but only 500 metric tonnes can be pumped.

As a result of increasing demand for molasses, the Stockfeed Manufacturers' Association of Zimbabwe (SMA) said in a statement that the price of the commodity has risen from US$141 per metric tonne in 2015 to US$157 per metric tonne in 2017, an 11% rise.

"In the past two years, the supply of molasses to the feed sector has been very erratic, leading to an increase in cost and a high dependency on imports and the foreign currency requirement this entails.

"The main reason for the erratic supply has been the increased use of molasses, mainly driven by the demand of ethanol for fuel and the needs of the Lesaffre yeast factory in Gweru.

"Although import substitution of blending ethanol with petrol as well as earnings from yeast exports is positive for the country, the negative effect of the shortage of molasses on cattle, sheep and goat production and livestock productivity in general cannot be ignored," said SMA.

According to data from the Zimbabwe National Statistics Agency, stockfeed manufacturers imported 1 993 metric tonnes of molasses between 2016 and 2017. It costs about US$135 to land a metric tonne of molasses from neighbouring Mozambique.

The estimated monthly average requirement for molasses by stockfeed manufacturers ranges between 1 000 metric tonnes per month and 1 500 metric tonnes per month.

According to correspondence circulated by SMA to industry players, stockfeed manufacturers will lobby government to structure a quota system for molasses which can be consumed by the livestock sector.

"Therefore, unless there is a special dispensation from government to allow some of the molasses earmarked for ethanol to be released for livestock, the stockfeed industry will have to import," read part of the correspondence in possession of the Zimbabwe Independent.

"The secretariat will make representation to the Ministries of Lands, Agriculture and Rural Resettlement and Industry, Commerce and Enterprise Development as well as the Office of the President and Cabinet outlining the predicament and requesting release of molasses from Triangle for the sector."

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