LISTED sugar processor, Tongaat Huletts says cheaper sugar imports are negatively affecting the country’s local industry by depressing sales volumes amid concerns of exposing consumers to health hazards.
Presenting the financial performance for the year 2023, Tongaat’s chairman, Canaan Dube said the Statutory Instrument 98 implemented by the government last year whose six months tenure ended in November 2022 prompted a huge knock on local industry’s viability.
“Local market share was compromised as a total of seventeen (17) brands were imported into the country during the SI’s tenure. The sugar industry estimated the total impact of these imports to have been 5% of the annual local sugar sales volume,” he said.
Dube underscored that world sugar markets are normally residual markets for excess sugar supply and are affected by support policies and/or subsidies implemented by governments of sugar producing countries.
“Consequently, world sugar markets often trade below global costs of production, meaning that imported sugar has an unfair price advantage over sugar produced locally in Zimbabwe where production costs are relatively higher,” he said.
In addition, Dube said, some of sugar imported did not comply with the labelling and Vitamin A fortification regulations, which would have formed part of the costs of locally produced sugar.
However, considering that the government introduced Statutory Instrument 80 of 2023 last month in a bid to neutralize exorbitant prices in the markets, the local sugar industry is set to experience further setbacks during the instrument’s tenure.
Meanwhile, for the year ended March 31 2023, the company’s share of total industry sugar sales volume of 381 820 tons was 52.3% .
Total industry sugar sales volume into the domestic market for the year, at 338 059 tons (2022: 356 253 tons) was 5% below prior year as a result of competition from low-cost imports. Industry export sales however, increased by 15% to 43 760 tons (2022: 38 000 tons) following an improvement of export volumes to the USA 17 751 tons in 2023 compared to 13 798 tons in 2022.
Source NewZimbabwe
