Staff Writer
Hippo Valley Estates says the sugar industry has been unaffected by the El Niño-induced drought due to adequate irrigation water supplies.
The sugar producer said while the country experienced adverse weather conditions, the industry as a whole was not significantly impacted due to sufficient water reserves in dams.
The Zimbabwe Stock Exchange-listed company, a major player in the sector, however, highlighted that the Mkwasine area, which primarily services private farmers, faced challenges due to lower water levels.
Hippo Valley assured the public of adequate sugar stocks to meet both domestic and export demands for the current year.
The company also emphasised that the drought is not expected to affect the industry’s overall performance.
“Notwithstanding that the country experienced El Niño-induced weather patterns, the industry was generally not adversely affected due to adequate irrigation water from the supplying dams, save for the Mkwasine area servicing private farmers where the water cover is less than a year,” Hippo Valley said in a trading update for the quarter ended June 30, 2024.
To mitigate the impact on farmers in the Mkwasine area, the sugar industry has implemented measures to rationalize water supplies from affected dams.
During the quarter, Hippo Valley said domestic sales declined by 7% in comparison to the prior period, with the spillover effects of duty-free sugar imports still noticeable during the period under review.
The group said sales performance was impacted by a slow start from the country’s sugar refineries, but this has since recovered.
The company said with the good start in sugar production, positive milling performance and continuous engagements with the authorities, there will be no need for the reintroduction of duty-free sugar imports in the current and ensuing years.
“The decrease in export sales volume for the industry was mainly a result of deliberate prioritisation of the domestic market in the first quarter to ensure consistent product availability to all local consumers and customers,” Hippo Valley said.
The group’s revenue realised at the end of the first quarter grew by 15% on the back of a better sales mix and price realisations despite the drop in overall sales volumes.
