Online Reporter
Sikhulekelani Moyo, Business Reporter
ZIMBABWE should amend its 1964 Sugar Production Control Act by October 31, engage an independent consultant to review the Division of Proceeds formula by the same date and recapitalise the National Railways of Zimbabwe through the Mutapa Investment Fund by December 31, 2026, with at least half of the rail infrastructure serving the sugar industry rehabilitated.
These are among 12 measures recommended by the Parliamentary Committee on Industry and Commerce following an extensive enquiry into the country’s sugar value chain, which has exposed deep structural challenges threatening the competitiveness and sustainability of a strategic industry.
The committee further recommends issuing bankable tenure to at least 70 percent of out-growers within two years, establishing a concessional financing facility at below 15 percent interest by
December 2026, and prioritising water and power supply for the sugar industry while transitioning to consumption-based water billing.
It also calls for Vitamin A fortification to be incorporated into import licensing to level the playing field, the installation of an additional mill at Mkwasine with a capacity of 5 000 to 10 000 tonnes per day, a review of the market structure by the Competition and Tariff Commission, and a review of sugar tax and fortification policies by December 31, 2026.
The report follows extensive stakeholder consultations, oral evidence sessions and verification visits to Tongaat Hulett’s Triangle and Hippo Valley estates, as well as out-grower plantations in the Lowveld.
The committee said sugar remains a strategic agro-industrial pillar, contributing to employment, electricity generation through bagasse, ethanol production and downstream manufacturing.
Key findings by the committee include monopoly milling.
“The Committee found that Zimbabwe has only two sugar mills that is Hippo Valley and Triangle, both owned by Tongaat Hulett, unlike Egypt and South Africa which have more than 14 mills. This dominance was found to limit competition and weaken farmers’ bargaining power,” reads the report.
“High cost structure: Farmers and millers cited prohibitive costs. 98 percent of fertiliser and herbicide raw materials are imported. A 15-hectare plot incurs employee costs of US$2 814, wear and tear US$2 697 and cane haulage US$2 517. Water from Zimbabwe National Water Authority (Zinwa) costs US$6,82 per megalitre, with 15 megalitres needed per hectare annually.
“Electricity is charged at US$4,75/kWh, with farmers paying an average ZW$1 799,73 per hectare per month.”
The committee also said the collapse of the National Railways of Zimbabwe has forced reliance on expensive road haulage. “Rail turnaround is over four days compared to one day by road. At the time of visit, the cane rail system was non-functional,” said the committee.
“Roads to mills were also in poor condition. Farmers in Mkwasine incur the highest haulage costs due to distance from mills.”
The committee also said non-bankable tenure prevents farmers from using land as collateral. Those who access loans are charged up to 60 percent interest per annum. “An estimated 90 percent of small-scale out-growers rely on contract farming,” said the committee.
“Division of Proceeds (DoP) Dispute: The revenue-sharing formula remains a major flashpoint.
“The current ratio stands at 80,5 percent for farmers and 19,5 percent for millers, a deviation from the regional average of 63 percent farmers/37 percent millers.
“Farmers allege lack of transparency, claiming millers control weighing without farmer representation.”
On pricing and taxes, the committee said local sugar is priced at US$890–900/tonne against an import parity price of US$600/tonne.
The sugar tax introduced in February 2024 at $0,001 per gram of added sugar increased beverage prices by 15-45 percent, leaving over 90 000 tonnes uncommitted for 2025, according to Delta
Beverages. Mandatory Vitamin A fortification, effective July 2017, adds US$9–10 per metric tonne, making local sugar uncompetitive in export markets.
On utilities, erratic water and electricity supply disrupts irrigation. “The prevailing water billing model charges based on allocation not actual consumption, while illegal upstream abstraction and underutilisation of Tugwi-Mukosi Dam worsen shortages,” said the committee.
The committee observed that the Sugar Production Control Act [Chapter 18:19] of 1964 is outdated and co-assigned to two ministries, creating inefficiencies.
It recommended 12 measures, including: expedite amendment of the Sugar Production Control Act by 31 October 2026, engage an independent consultant to review the DoP formula by 31 October 2026 and recapitalise NRZ by Mutapa Investment Fund by 31 December 2026 and rehabilitate 50 percent of rail infrastructure servicing the sugar industry.
It also recommended issuing bankable tenure to at least 70 percent of out-growers within two years, establish a concessional financing facility below 15 percent interest by December 2026 and prioritise water and power supply for the sugar industry and transition to consumption-based water billing.
Also, incorporate Vitamin A fortification into import licensing to level the playing field, install an additional mill in Mkwasine with 5 000 to 10 000 tonnes per day capacity and review of market structure by the Competition and Tariff Commission and review of sugar tax and fortification policies by December 31, 2026.
“The sugar value chain remains a critical pillar of the economy with strong potential for growth and value addition,” said the committee. “However, its competitiveness is constrained by macroeconomic instability, high input costs, infrastructure deficits and institutional inefficiencies.”
The committee also urged coordinated reforms to ensure a sustainable, competitive and inclusive sector.
