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May 20, 2009

Zimbabwe sugar output down but EU exports rise

Zimbabwe's sugar production fell in the year to end-March as the industry took a knock from shortages of inputs and electricity but exports to its main market the European Union rose, an industry official said.

Steve Frampton, Zimbabwe Sugar Sales general manager, said output of raw sugar had fallen 15 percent to 297,662 tonnes during the April-March period, down from 348,670 tonnes in the same period in 2008.

"The major challenges facing the raw sugar industry include availability of critical inputs including coal, fertilisers and chemicals ... and electricity for irrigation," Frampton said. He said a lack of consistent supply of rail wagons to move cane and sugar had also impacted on production.

Zimbabwe's sugar production has been in decline since 2000, from a high of 600,000 tonnes when President Robert Mugabe's government started seizing white-owned commercial farms, including sugarcane plantations, to resettle landless blacks.

Frampton urged the government to help restore confidence on such issues as land acquisition, land tenure and the enforcement of law and order to re-assure growers, millers and refiners.

"There should be a land audit, an assessment of the performance of new settler farmers, maintenance and retention of critical technical skills (and) declaration that sugar is a strategic crop," Frampton said.

Critics say most of the resettled black farmers lack commercial farming skills and do not have adequate inputs to fully utilise the land they inherited from white farmers.

Zimbabwe, along with several former European colonies in the ACP, supply the EU, the world's biggest sugar purchaser, with 1.6 million to 1.7 million tonnes of the commodity each year under preferential deals at above-market prices.

In 2006 the EU started reducing preferential sugar prices and from Oct. 1 this year the price will be cut from 448.80 euros ($604.7) per tonne to 335.20 euros.

Frampton said exports to the EU had nonetheless risen to 86,880 tonnes in the just-ended season, up from 55,910 tonnes previously. He did not give reasons for the jump but added that the figure was unlikely to change this year.

Zimbabwe was allocated 44 million euros to compensate for the cut in the sugar price but has only drawn 2.7 million euros and has applied for 5.78 million euros this year.

Besides exports to the EU, Zimbabwe also ships sugar to the United States, where it has a 12,012 tonne quota, as well as South Africa, Egypt, India, Malaysia and Canada.

The southern African country has potential to raise production to 1 million tonnes, Frampton said, if water for irrigation is increased by constructing more dams in the sugarcane producing southern region.

Reuters

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