Imported sugar snatches market share

SUGAR producer Hippo Valley Estates says 17 sugar brands were imported into the country after the lifting of restrictions last year through the promulgation of a statutory instrument.
In a statement accompanying the company’s 2023 annual report, Hippo Valley said the imported brands made significant market inroads during Statutory Instrument 98’s six-month tenure going up to November 2022
“The sugar industry estimated the total impact of these imports to have been five percent of the annual local sugar sales volume,” Hippo Valley said.
“World sugar markets are residual markets for excess 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.
“In addition, some of the 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,” the company added.
“Profit margins were further eroded by the company’s inability to fully recover higher production costs in its pricing structure in an effort to balance affordability for consumers whilst also having to contend with competitive pressures from sugar imports in the six-month period to November 2022.
“However, management continues to monitor these developments closely to respond appropriately to mitigate against value loss,” Hippo Valley said.
Cane deliveries from the company’s own plantations were 13 percent above the prior year.
Private farmer cane deliveries contributed 42 percent of the total cane supply and were two percent below prior year, having achieved yields of 71,85tch compared to 73,75tch in 2022.
Sugar produced however decreased by 1 809 tonnes (one percent) notwithstanding that an additional 48 189 tonnes (three percent) of cane was delivered to the mill for crushing.
“Ordinarily, this additional volume of cane would have increased sugar production by approximately 6 000 tonnes. The decrease was occasioned by lower cane quality attributable to prolonged wet weather and significant rainfall received at both the onset and end of the season,” Hippo Valley said.
Inflation-adjusted revenue rose by 37 percent to $139,3 billion on the back of price adjustments in response to increasing cost pressures.
Resultantly, operating profit and profit for the year grew by 22 percent to $25,9 billion and by 24 percent to $17,2 billion respectively, with the majority of the growth attributable to changes in the value of biological assets.
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