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Business Reporter
Zimbabwe is expected to benefit significantly from the limited global sugar supply situation, which will keep prices elevated worldwide in 2024 at a time output from major producers is forecast to be weighed down by the El Niño weather phenomenon.
While drought is the main threat to food production, El Niño can also cause heavy rains, flooding or extremely hot or cold weather, which can lead to animal disease outbreaks, including zoonosis and food-borne diseases, as well as plant pests and forest fires.
Zimbabwe is recognised as the lowest-cost sugar producer in Southern Africa. Sugar operations in Zimbabwe consist of Triangle and Hippo Valley Estates, representing a combined installed sugar milling capacity of 600 000 tonnes.
Global prices of sugar rose to a 15-year high in recent weeks, averaging US$542,34 per tonne in September 2023, up a 9,8 percent from the August 2023 price level, reflecting a 48,4 percent jump year on year.
A research paper by stock broking firm Morgan & Co showed that the Southern African nation has increased its hectarage under the sugar cane crop with rains projected this year to improve the quality of the crop.
“Sugar production in Zimbabwe is estimated to increase to 410,000 tonnes in the 2023/24 season, up from 396 683 tonnes in the previous season. Key drivers of sugar production include hectarage and cane quality,” reckons Morgan and Company.
Zimbabwe has been investing in irrigation infrastructure across the country, one of the reasons for increased land under sugar cane and other crops, informed by the Government’s policy initiatives to mitigate the impact of climate change
“Area planted has increased in the last decade, from 44 700 ha in the 2014/15 season to 54 000 ha in the 2022/23 season. This is largely the result of the completion of the Tugwi Mukosi irrigation project that was completed in 2017 as well as progress made under Project Kilimanjaro,” said the research report.
Currently, the Tugwi-Mukosi and Mutirikwi Dams, which collectively supply water for 72 percent of the total sugarcane, have enough water to irrigate sugarcane fields for the next two seasons.
To date, 700 hectares have already been planted under Project Kilimanjaro.
Morgan and Co said; “Sugarcane quality is also affected by prolonged wet weather and heavy rainfall which tend to negatively affect cane quality, as was the case in the 2022/23 season. Given the anticipated El Niñoin the coming season, the cane quality is expected to improve in the 2023/24 season.”
Local production currently exceeds consumption, and the balance of production is exported under duty-free quotas.
“Sugar exports have declined in the last two years because of unfavourable export prices in Europe since 2017 and restrictive trade policies in Kenya, but climate-related shocks to global supply have resulted in a rebound in the global price, much to local producers’ benefit,” the report added.
On August 23, it was reported that the world’s biggest sugar producer, India, was considering banning its sugar mills from exporting sugar in the 2023/24 season beginning in October as a lack of monsoon rain reduced the country’s sugar crop.
India’s Weather Department said this year’s monsoon rains (Jun-Sep) were -6 percent below average, the poorest monsoon rainfall in 5 years. India’s food ministry said it will make a final decision about sugar exports for 2023/24 when actual estimates of total production are available.
During the current 2022/23 season to September 30, 2023 India allowed mills to export only 6,1 million tonnes of sugar after letting them export a record 11,1 million tonnes last season.
India’s Sugar Mills Association (ISMA) on August 2, 2023 forecast that India’s 2023/24 sugar production would decline -3,4 percent year on year to 31,68 million tonnes.
Online Reporter