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Sugar imports not so sweet for Sadc producers

Victoria Falls – Southern African sugar producers are in a pickle over growing sugar imports which are flooding local markets and stretching demand trends, despite efforts to discourage the buying of sugar from other producers.

Experts and government officials said at a conference of Southern African Development Community (Sadc) producers of the sweet commodity being hosted by Zimbabwe in Victoria Falls that sugar imports have become problematic, especially for SA sugar producer Tongaat Hulett, which also has majority ownership in two Zimbabwe producers.
 
Tongaat Hulett runs Hippo Valley and Triangle Sugar Corporation and the SA agri-processing firm said in its recent report that sugar imports had forced down its earnings.

Producers in Zimbabwe and South Africa are now lobbying the two governments to craft laws prohibiting sugar imports. However, Vandudzai Zirebwa, an economist at the Buy Zimbabwe pressure and lobby group, told Fin24.com on Wednesday in an interview that a complete ban of sugar imports was unlikely as countries may have trade ties with other producing countries.
 
"When local producers have capacity to meet local demand, they should be given the room and imports limited.

"However, a total ban may not be possible in some cases as Zimbabwe may have trade pacts and agreements with the countries from which the imports are coming, and totally banning imports will be a violation of this," Zirebwa said.

Zimbabwe's Industry and Commerce Minister Mike Bimha said at the Victoria Falls conference that the country's government had moved in to limit imports by imposing fines on sugar imports. He said the government had liberalised the sugar industry, as the commodity is now being grown by private sector players.

"We note with concern the recent shockwaves experienced in the industry as a result of cheap sugar imports,  which displaced some 100 000 tonnes of local sugar from the market. Government responded by appropriate protective measures," said Bimha.
 
He added that "sugar was removed from the general import licence list and a tax of $100 per tonne of imported sugar" has since been imposed to prop up the local sugar industry. Tongaat Hulett's units in Zimbabwe have embarked on ambitious private farmer cane-growing schemes expected to boost output.
 
Currently about 16 000 hectares of cane is grown by private farmers in Zimbabwe, while Triangle and Hippo Valley farm on about 29 000ha. However, Tongaat Hulett has previously had to grapple with threats to the certainty of its land leases after invaders took over some portions of its land, while the government has also previously tried to cancel its leases over alleged non-compliance with the indigenisation policy.
 
"As Sadc, we are worried about drop in the price of sugar on the world market. We are affected by the drift of poorly processed sugar cheaply priced for dumping purposes on our markets," said Bimha.

  - Fin24
 
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