Zambia Sugar Production Up By 47,000 tonnes

by Tryson Tembo

Improved cane supply and farming practices have resulted in Zambia Sugar increasing sugar production for the 2018/2019 farming season to 400,000 tonnes from 353,000 tonnes in the previous season.

During the period under review, cane supply and quality have been trending above those of the past three years mainly due to improved bulk water supply and infield irrigation.

Zambia Daily Mail

South African Sugarcane Industry Hit By Competition, World Glut and New Soft Drinks Sugar Tax

In the wake of the appointment of a new South African cabinet, newly elected SA Canegrowers Chairman, Rex Talmage... saids the change in leadership offered the hope of a rescue plan for an "industry on its knees".

In the year under review, demand for refined sugar in the Southern African Customs Union countries was at its lowest in 35 seasons due mainly to the introduction of the Health Promotion levy (HPL) or sugar tax on soft drinks by the South African government in 2018.

Industry experts estimate that over 400 000 tons were displaced as a direct result of the levy over the 2018/19 season resulting in at least 600 000 tons being exported at record low prices on an over-supplied world market.

The quality of the South African crop during the 2018/19 season was the third highest in 19 seasons while the area harvested decreased from 252 049ha to 247 385ha.

Despite intense lobbying with the Department of Trade and Industry and the International Trade Administration Commission in 2018 for an increase in the Dollar-Based Reference Price (DBRP) import tariff from $566 to $856 per ton of sugar, the industry was granted a tariff of just $680 per ton. The new tariff has proven ineffective in stemming the tide of cheap imported sugar into the country.

The year under review also saw a deluge of sugar dumped on the South African market from neighbouring Eswatini. Eswatini is expected to produce about 743 000 tons of sugar in the 2019/20 season of which most will make its way onto the South African market free of any import tariff in line with the free trade agreements in the Southern African Customs Union (SACU) region.

While commercial growers have been hard hit, the worst affected are the over 20 000 small-scale growers who rely solely on the crop for their livelihoods.

Full article...

Zimbabwe Sugarcane Output Up 3rd Year In A Row

Zimbabwe sugar output to reach 500 000 metric tonnes this year, surpassing 2018’s 460 000 tonnes.

The Commercial Sugar Producers Association (CSPA) said members had initially projected to increase production from 95 tonnes per hectare to 97 tonnes but had since reviewed the figure upwards to over 100 tonnes.

Sugar milling company Tongaat Hulett has projected a productivity increase of from 15 tonnes per hectare to 120 tonnes per hectare.

The developments are partly attributed to increased irrigation capacity from full dams, despite the rest of Zimbabwean agriculture suffering from the effects of a crippling 2018/19 drought.

Sugar is second to tobacco in Zimbabwe’s foreign currency earnings from agriculture.

Tongaat Hulett, the South African firm, produces about 80 percent of the total sugar production while 20 percent is produced by private farmers. It produces from its plantations in Hippo Valley and Triangle.

At least 65 percent of the produced sugar is for domestic use while the rest is for export.

Before the land reforms of the year 2000, sugar cane production was a sole preserve for Tongaat Hulett.

CAJ News

A book about a South African sugar sector built on colonialism, indentured labour and massive profit

Sugar and Settlers: The colonisation of the Natal South Coast 1850-1910 is a doctoral dissertation by  Duncan du Bois.

du Bois, a retired teacher, says, "My research involved delving through 1,500 boxes of unpublished material in the Archives and perusing 58 years of editions of the Natal Mercury at the Killie Campbell library, aside from numerous other sources."

"People ask why I embarked on such an undertaking. The answer is simple: I am passionate about History and enjoy research and writing."

 Grethe Koen, a journalist on the City Press newspaper, has written a light review of the book.

African Agriculture

South African sugar producers expand into Mozambique

Tariff rebates by the European Union on Mozambican products are one reason South African companies producers are finding it attractive to grow and process sugar cane in that country. Lower labor costs and a growing local sugar demand are other reasons.

THe South African CEO of major sugar producer Tongaat Hulett says, "Sugar production in Mozambique is expected to grow by 30% over the next three years to above 310000 tonnes/year (from 233000 tonnes/year) together with a reduction in unit costs."

article...Financial Mail

Flooding losses cause Rwanda sugar company to seek upland cane cultivation

Kabuye Sugar Works, Rwanda's sole sugar procedure, seeks to grow sugar cane at higher elevations because of seasonal flooding problems which cut output by 3000 and 4000 tonnes of sugar annually, worsening periodic shortages of the commodity, most of which is imported.


Kabuye'e annual output is 10,000 tonnes, compared to a demand of 50,000 tonnes.


Meanwhile, a government official has announced that a second sugar plant is being planned.

African Agriculture

Swaziland farmers increase sugar cane planting, use of irrigation

Swaziland, Afriac's fourth largest producer of sugar (after  South Africa, Egypt and Sudan), is set to increase production as more small scale farmers take up sugar cane cultivation, and access to irrigation increases. A replanting programme with higher-yielding varieties is also underway.

In an interview with Bloomberg, Mike Matsebula, chief executive officer of the Swaziland Sugar Association, projected that production may rise to 656,250 tonnes in 2013, a rise of 5% over the 2012 figure of 625,000 tonnes.

African Agriculture

South Africans to invest in Mozambique's sugar sector

A group of South Africans is expected to invest in sugar growing on a 10,000 hectare area in Mozambique's Zambézia province.

A district official is reported to have told news agencies that work on the sugar plant was expected to begin in the second half of 2012. 400 direct jobs and up to 3000 more downstream are hoped for from the investment.

The sugar plant would be Mozambique's fifth.

African Agriculture

Sudan to increase sugar production, cut imports, begin exports by 2014

Sudan plans to inaugurate a sugar plant in April, to help reduce the country's import bill and with the aim to achieve self-sufficiency and surplus for export by 2014.

The White Nile Sugar Company will start with an initial annual white sugar output of 150,000 tons, which is projected to reach the plant's full capacity of 450,000 tons in three years, according to a report by Reuters news agency.

Sudan currently imports at least 400,000 tons of sugar annually, despite being one of Africa's biggest producers.

The new plant is said to be a joint venture between foreign and Sudanese investors. Sudan’s Kenana Sugar Co, owned by Saudi Arabia, Kuwait and Sudan, is the biggest shareholder. Other shareholders are Sudanese firms and two Egyptian investors.

The new sugar plant will also produce power, animal feed and ethanol.

Reuters reports the country's industry minister as saying Sudan's combined sugar output is expected to reach 1.5 million tons by 2014. Investments from China and India are expected to boost that figure over the 2 million ton mark in 2016.


African Agriculture

Land conflicts cause South African sugar investor to abandon Tanzania for Mali

A subsidiary of South African sugar concern Illovo has given up a ten year effort to set up a plantation in Tanzania over long running land squabbles with locals. The Tanzania Daily News reported in January that the company is now seeking to establish the operation in Mali.

Kilombero Sugar Company had initially planned to invest in about 8,000 hectares out of a potential 23,000 hectares for cane cultivation, but the endless compensation claims from locals them decide the project was more trouble than it was worth.

The Sugar Board of Tanzania (SBT) is reported to have said the total land, if fully developed, had the potential to produce 240,000 tonnes of sugar every year. Tanzania suffers from periodic shortages of sugar which have to be plugged with imports.

Many villagers had refused to vacate the land, and others engaged the courts in long-running disagreements over fair compensation for their land. An agreement by the villagers in 2011 to seek an out of court settlement to the dispute was achieved when the investor had apparently lost interest.

An SBT official is reported to have ‘blamed politicians for instigating confrontations between villagers and the investor.’

A company official said Kilombero had given up its efforts to set up the plantation in Luipa, Kilombero District of Morogoro Region and was pursuing opportunities in Mali, which “has friendly investment policies and good incentives."

An editorial in the Daily News put the blame on government for not compensating the villagers as stipulated in the country’s land laws.

Authorities are making fresh moves to attract new investors.

African Agriculture

Good weather, more growers to see Uganda sugar production up 26% in 2012

Good weather and increased cultivation by small scale farmers is expected to increase sugar production in Uganda from 259,413 in 2011 to 327,075 tonnes this year. just over the country’s annual requirement of 320,000 tonnes.

Strong rains have been experienced in areas that saw drought in 2011, according to a sugar sector official quoted by Reuters.

The expected 2012 would represent a reversal of two years of a recent trend of year to year decline. Last year's output was significantly down from 2010's production of 292,051 tonnes.

The sugar output for 2011 had been predicted to be 350,000 tonnes before drought and a criminally set fire at Kinyara Sugar Works, the country’s second biggest sugar refiner, reduced the actual yield to 259,000 tonnes. The shortfall was made up by duty-free imports in 2011, which Ugandan refiners this year then complained left them with higher-priced stocks that could not compete.

African Agriculture

Kenya retains COMESA import quota on tax free sugar

The government of Kenya has received permission from COMESA to maintain in place the country’s current sugar safeguard measures for a further 2 years. However this has been made conditional upon an intensification of efforts to privatise and modernise the sugar sector, which has been making only slow progress since the initial activation of safeguard arrangements.

The Kenyan government has recently ‘published new laws allowing strategic investors to take up at least a 51 per cent stake in the five government run sugar companies that are scheduled for sale’, and a government spokesperson maintains that the privatisation process could be completed within 6 months. However, bottle-necks related to parliamentary procedures could delay progress.

Press reports noted that the conditionalities agreed by the COMESA Council were similar to earlier conditionalities linked to the previous extension of the safeguard measures.

Efforts are also under way to both improve the sector’s productivity and diversify the product range. Sugar sector operators are being required to ‘deepen research on high sucrose and early maturing cane varieties, while the Kenya Sugar Board (KSB) and the Kenya Sugar Research Foundation (Kesref) should spearhead adoption of research findings by cane growers’.

Press reports also indicate that investment is under way at Mumias Sugars to produce both beverage-grade alcohol and ethanol alongside sugar.

In September, meanwhile, it was announced that Mauritian sugar company Omnicane is planning to invest US$180 million in a sugar plant in the coastal region of Kenya. The project is to include ‘the establishment of an 18-megawatt bagasse power facility and a 30,000-litre ethanol production plant’, and Omnicane’s investment ‘is expected to boost the sugar production in the country, which presently is dominated by Mumias Sugar’. This is reportedly ‘one of the biggest foreign direct investments in Kenyan agro industry’.

Omnicane is expected to use its experience of modernising the sugar sector in Mauritius in the Kenyan context. Sugar production is to make use of irrigated land, based on a ‘nucleus system’ which ‘allows for planning and steady supply of uniform quality cane’.

Afriquejet

Uganda: simmering tension over turning protected forest into farmland

A plan to replace a large swathe of protected rainforest in Uganda with sugarcane could lead to further civil unrest in a year when nine people have been killed during strikes and protests against the rising cost of living.

Politicians and activists have warned they will fight the revived plan to uproot just less than a quarter of the 30,000 hectare Mariba Forest, 50km east of Kampala, and allocate the land to the perennially unprofitable Sugar Corporation of Uganda Limited (SCOUL), a joint venture between India's Mehta Group and the Ugandan government.

In its defence, the government points to the prospect of new jobs and the need to alleviate the country's chronic sugar shortages. It also claims the forest area at stake is degraded.

In August, President Yoweri Museveni warned he was ready for a fight and dismissed his detractors as "unarmed terrorists." More recently, he appears to have softened his stance, saying he is open to alternative proposals on increasing sugar production.

At least three people died during a protest in 2007 against a similar plan to allocate part of Mabira to SCOUL.

Politicians opposed to the scheme worry about a repeat of alleged abuses by security forces during protests in April and May 2011, which, according to Human Right Watch, included killings, beatings, and abusive and arbitrary arrest of protesters and uninvolved bystanders.

A government-organised trip to show journalists supposedly degraded parts of Mabira Forest Reserve backfired after the guides failed to find evidence of degradation in the lush tropical forest.

Activist Brendah Nabukenya said, "Destroying it is like erasing part of our heritage. We believe it's a conspiracy between the few who have the power who are putting self above our environment."

"The forests protect micro-climates and because we have degraded our environment, we are witnessing landslides every year now," said Frank Muramuzi, executive director of the National Association of Professional Environmentalists (NAPE) and national convenor of the pressure group, Save Mabira Crusaders.

At least 43 people died in August 2011 in landslides in the eastern Bulambuli District; more than 350 died and thousands were left displaced during landslides in Bududa District in March 2010.

Noting that the forest had been protected since 1932, mainly because of its biodiversity, Annet Nakyeyune, an environmentalist and professor at Makerere University, said Mabira was home to several threatened animal species, provided ecosystem services to its surrounding communities and was a source of revenue from eco-tourism.

Conservationists warn that up to 312 species of trees, 287 species of bird and 199 types of butterfly were under threat.

According to Godber Tumushabe, executive director of the Advocates Coalition for Development and Environment, destruction of the forest would significantly disrupt the water flows in the region and compromise hydro-power generation capacities.

A March 2011 report by the directorate of water resources in the Ministry of Water and Environment found evidence of water stress in many areas of the country. The report blamed the decline in surface and ground water on changes in land use, climate change, land degradation, deforestation and poor watershed management.

The debate over Mabira comes when Uganda's economy is very weak, with inflation reaching 21.4 percent in August, fuel prices continuing to rise and the shilling steadily declining against the dollar, reaching a record low of about 2,800 in August 2011.

"Transport has gone up, many of the things I use at home are out of my reach, but I have to feed my three children because I am a single mother," said Julia Nassanga, a market vendor in a Kampala suburb. "Finding sugar at our home is unthinkable now."

Kampala traders shut up shop for two days in July in protest, and in early September Uganda's teachers also downed tools for the second time this year, demanding a 100 percent increase in salary. Teachers in Uganda earn less than their counterparts in Kenya and Tanzania, and their salaries have not been adjusted in line with inflation. The government has offered a 44 percent pay increase starting next financial year, but no agreement has so far been reached.

The industrial action follows another suggestion by Museveni that worries human rights activists: a new bill would scrap the constitutional right to bail, making it possible for people suspected of crimes, including rioting and economic sabotage, to be held for up to six months.

"This is a blatant assault on Ugandans' fundamental human rights and freedoms, the cardinal principle of presumption of innocence and an attack on the criminal justice system that threatens to take away judicial discretion in granting bail," Kizito Lumu, a human rights lawyer, told IRIN.

Museveni is still meeting various stakeholders to discuss the proposed forest giveaway.

IRIN

Zambia sugar output soars

by Chiwoyu Sinyangwe

Output at Zambia Sugar has this year risen to an all-time high of 385,000 tonnes on account of increased capacity utilisation at its new factory and a favourable rainfall pattern.

In the 2010 season, Zambia Sugar Plc, produced 315,000 tonnes of sugar.

The country’s biggest sugar producer in December 2009 commissioned the K1 trillion Nakambala Sugar Estate Expansion Project, which raised sugar production capacity at its factory from previous 200,000 tonnes to 450,000 tonnes.

... total cane throughput both from its internal sources and from outgrowers rose by 19 per cent to 3.1 million tonnes.

About 60 per cent of sugar from Nakambala factory goes to the European Union and the Great Lakes region, with each market claiming half of the lot.

Post Zambia

Swaziland sugar production to rise

by Duncan Miriri

Swaziland's sugar production is likely to jump by a quarter in the next five years, thanks to more land being put under cultivation, an industry group said on March 25.

Mike Matsebula, chief executive of Swaziland Sugar Association, said at a conference on sugar in the Kenyan capital Nairobi the southern African producer of the sweetener will also raise production by about 11 percent this year.

"We are currently producing, in round numbers, 600,000 tonnes (per year). In five years, we will be producing an additional 150,000 tonnes at least," he said.

Sugar is the second biggest source of foreign exchange for the country, ranked third-largest sugar producer in Africa.

"More land is being brought under cane. There is at least two major irrigation projects, which are intended to provide water for more cane that is going to be cultivated," Matsebula said.

He put the new land to be planted with sugar at 12,000 hectares in the next five years and 1,000 this year, on top of the 44,000 hectares already under cultivation.

Although it has low lying lands with good soil and a warm climate ideal for sugar growing, a drought cut its production to 582,000 tonnes last year from just over 600,000 tonnes in 2009.

But that will also serve to spur the expected jump in production this year, Matsebula said. "We are starting from a lower base than it would have been the case otherwise," he said.

Swaziland exports half of its sugar output to east Africa and Europe, while the rest is consumed locally and in the Southern Africa Customs Union, under the Southern African Development Community, which is treated as a domestic market.

"We are investigating west Africa and we are doing so jointly as the SADC sugar industries because as an individual country we can't compete with the present supplier to west Africa because of distance and other logistical considerations," Matsebula said.

But to get to that market, SADC will seek preferential terms to compete with other suppliers, mainly Brazil, which enjoys low freight costs due to bulk-shipping, he added.

"For us to be able to really exploit the west African markets there has to be preferential arrangements given by west Africa," he said.

Although Swaziland is one of the more efficient producers in Africa at 14 cents per lb, the industry faces challenges from rising energy costs. Electricity is used to power irrigation pumps while coal is used to fire boilers.

It has also not benefited from the jump in the international price of sugar, which hit a 30-year high in February of 36.08 cents a lb but has since fallen back and was trading on Friday at around 27.30 cents.

"Because you have long term contracts, then you are not able to benefit from those spikes ... we have only benefited a little bit where we were able to move uncommitted sugar to the world market including east Africa," Matsebula said.

"It gives us good lessons going forward. We now have to revise our marketing strategy and make sure that we can anticipate such developments in future."

Of the three sugar mills in the country, two are owned by the Royal Swaziland Sugar Corporation, while the other one is jointly held by South Africa's Illovo Sugar and a local firm.

Reuters

Tanzania sugar agro-industrial initiative receives government support

The government’s dream of realising a ‘green revolution’ resulting in part from the implementation of the national Kilimo Kwanza initiative is fast becoming a reality at Kagera Sugar Company Limited.

Prime Minister Mizengo Pinda made a working tour of the agro-industrial complex in Kagera Region yesterday and was visibly impressed by the massive scale on which it was engaged in making an emphatic contribution to the development of agriculture in Tanzania.

He described the firm as one the most successful commercial agricultural projects Tanzania currently boasts, adding that the investment it was making in irrigation was sure to make agriculture “the pride of our country for many generations to come”.

“I have witnessed almost 10,000 hectares of land covered by a green blanket of sugarcane. I have also witnessed a huge fleet of modern agricultural machinery clearing land at a rapid pace for further expansion of the plantations,” he added.

The PM explained that he was further impressed by way the company was making deliberate efforts to support outgrowers and neighbouring communities socially and economically.

Accordingly, he appealed to more and more residents of the area to engage in sugarcane farming “and thus benefit from the existence of a reliable market for their crop just next door”.

He also called on more players in the industrial sector generally to emulate Kagera Sugar in fully supporting Kilimo Kwanza, an initiative resulting from partnership between the government and the private sector, including the Tanzania National Business Council.

Kagera Sugar general manager Ashwin Rana briefed the PM on how they have been deploying modern technology towards the realisation of “a truly modern commercial agriculture.

“Bulldozers initially clear the bush and flatten the myriad anthills, before computerised land plane machines laser level the ground, followed by ploughing and ridging on a scale never before seen in East Africa,” said the GM, adding that over 1,500 hectares of new farmland is put under sugarcane at the company every year.

“The latest technology is employed to make the most economical use of the land and ensure efficient irrigation and drainage for maximum production. This has been achieved through high definition, infra-red Lidar aerial surveying, followed by GPS and Laser technology used to prepare and level the land and install drainage and irrigation canals,” he noted.

Rana pointed out that the firm has the largest centre-pivot installation in sub-Saharan Africa, covering 4,000 hectares of sugarcane, “whereas the system comprises pump stations on the Kagera River which feed a network of massive underground pipes that cover the sugarcane fields”.

He said over 100 kilometres of underground piping has been installed on the estate to ensure availability of water “literally at the flick of a switch”.

“These in turn feed the automated centre pivots that irrigate the sugarcane 24 hours per day throughout the season, ensuring optimum growing conditions and high yields. This modern state of the art system pumps water from the Kagera River, transforming the area into a luscious green belt producing over 100 tonnes of sugarcane per hectare,” he elaborated.

The GM also explained that they have already embarked on Phase II of the irrigation infrastructure by installing a further 42 pivots during the current season to cover an additional 3,000 hectares of land at a cost of 25 billion/-.

“The communities neighbouring our company, notably sugarcane growers, have also been benefited immensely from our activities because their farms progress rapidly largely owing to the material and other support we extend to them from time to time,” he said.

GM Rana explained that the support has been in the form of offers of use of tractors and ploughs, supply of seedcane and technical advice, and guarantees for loans requested by outgrowers from banks and other financial institutions.

He said this has had a positive effect on the lives and economies of the local communities because it has helped them generating more wealth and, by extension, alleviating poverty.

Kagera Sugarcane Outgrowers Association chairman Annas Swaibu confirmed the reports, saying: “Our community of outgrowers is extremely grateful for the ongoing support and the cordial relations they have with the company. The cooperation has really improved our lives.”

GM Rana meanwhile revealed that his company has spent some 180 billion/- since it was privatised, chiefly in agricultural and irrigation infrastructure as well as in factory rehabilitation and expansion.

“The company’s strategic plans recognise that the use of irrigation is a crucial necessity for the success of any large-scale agricultural project. The added benefit of irrigation is that sugarcane yields can go from 50 to over 100 tonnes per hectare as well as give the assurance of having a good crop irrespective of adverse weather conditions,” he added.

He said that would ensure that the most efficient use was made of available land and water resources, “leading to predictable – possibly optimum – crops harvests”.

He added that the company would ultimately have the ability to grow and process 1 million tonnes of sugarcane, producing 100,000 tonnes of sugar a year.


IPP Media

Zambia sugar company generates its own electricity

by Chris Mfula Zambia Sugar, a unit of South Africa's Illovo Sugar, has started generating all of its own power needs, ending its reliance on shaky state grid supplies, a senior company official said on August 17. Company secretary Lovemore Sievu said the firm was producing 40 megawatts (MW) of electricity from cane sugar residues, more than the 36 MW used by its factory and irrigation units. "One of the things that was planned and has happened during this expansion has been power generation, and we are now certainly able to satisfy our requirements," Sievu said. "We now generate about 40 MW of electricity on our own. The factory uses 13 MW, and the balance of 23 MW is used for irrigation, while the rest we send to the national grid," he said. The company is still connected to state power utility Zesco but only to access 2 MW of power needed to stabilize the factory load and for initial power generation, Sievu said. Zambia Sugar, the southern African nation's largest sugar producer, last year cut its production forecast to 350,000 tonnes from 420,000 for the year to March 2010 due to heavy rains. It said in December it planned to double annual sugar exports to the European Union to 200,000 tonnes in three to four years, benefiting from duty and quota free access. Reuters

South African sugar production hurt by low rainfall

by Edward West

Tongaat Hulett, a large-scale agri-processing business and one of SA's biggest sugar producers, has said local production is being hurt by low rainfall in the KwaZulu-Natal north coast region.

Peter Staude, CEO of the KwaZulu-Natal sugar, starch and property development group, said local sugar production in the 2010-11 season was expected to fall slightly from 2009-10, when 564 000 tons were produced.

Mr Staude was updating shareholders about the group's operations during the annual general meeting recently.

Rainfall on KwaZulu-Natal's north coast fell to 252mm during the January-June cane-growing months this year, compared with a long-term mean of 491mm. The anticipated decline in production was in spite of the hectares under cane supplying the mill increasing by about 2000ha.

Turning to maize, Mr Staude said the total South African maize harvest for this year was projected at more than 13-million tons, the largest crop in 29 years. The group converts more than 600 000 tons of maize a year into starch and starch-based products for use in food manufacturing and a range of industrial products.

The price of maize in SA through to this month was trading close to the world price, which would in turn contribute to the competitiveness of the starch operation.

Sales of starch and glucose continued to reflect the contraction in consumer spending, particularly in prepared foods, confectionery and canning.

A key focus for the group, including its other southern African operations, was to increase sugar production from 957 000 tons milled in the 2009-10 season to the installed milling capacity of 1,9-million tons a year, with a reduction in the cost of production.

Sugar production in Zimbabwe for the 2010-11 season was expected to be 330 000- 350 000 tons, up from 259 000 tons in 2009-10. In Mozambique, sugar production was expected to be 230 000- 250 000 tons, from 134 000 tons in 2009-10.

Unseasonal rain in Mozambique and rehabilitation work on the Hippo Valley mill in Zimbabwe caused sugar production to start later than expected.

Exchange rate movements in the past few months had not been in Tongaat's favour, with the rand now 16% stronger against the euro than in 2009-10. Movement in the rand, dollar, euro and Mozambique meticais affects Tongaat's revenue streams, costs and the conversion of profits into rand.

Business Day

Kenya cuts sugar production forecast as rains curb deliveries

by Sarah McGregor
Kenya, East Africa’s biggest sugar producer, cut its forecast for this year’s crop by 3.5 percent after heavy rains hampered harvesting and curbed deliveries.

The estimate was reduced to 550,000 metric tons from a previous projection of 569,830 tons, Rosemary Mkok, chief executive officer of the Kenya Sugar Board, said in an interview in the capital, Nairobi on June 22. The latest forecast is still ahead of last year’s record production of 548,207 tons.

“The first quarter we weren’t performing well because there was so much rain and the roads were bad and farmers couldn’t get their heavy equipment through the fields,” Mkok said.

Heavy downpours during the March-to-May rainy season ended an almost two-year drought in Kenya that had depleted hydropower reserves and cut agricultural production.

Last year, sugar output rose 5.7 percent after Kibos Sugar Co. built a new processing factory and West Kenya Sugar Co. expanded its operations, said Mkok. The companies operate in western Kenya along with rivals Mumias Sugar Co. and Soin Sugar Co. The four Kenyan-owned companies account for 60 percent of total production in the East African country.

Kenya’s government is expected to complete by December the sale of stakes in five sugar refineries, Mkok said.

“The government wants to divest part of its shareholding to get the capital to modernize and expand capacity,” Mkok said.

Kenya plans to sell majority stakes in the refineries to private investors and 30 percent to growers, former Agriculture Minister William Ruto said in January. The remainder will be sold in initial public offerings once the profitability of each refinery has improved, he said.

Kenya intends to raise sugar production to as much as 750,000 tons a year to meet demand in East Africa’s biggest economy, Mkok said, without providing further details.

About 250,000 Kenyans farm sugar, more than 80 percent of them on plots of less than a hectare (2.47 acres), in the Nyanza and Western provinces and parts of the Rift Valley, she said.


Business Week

Cuba reports worst sugar harvest since 1905

by David Ariosto

Cuba's sugar harvest this year is the worst it's been since 1905, the country's state-run daily newspaper reported.

Citing poor organizational planning, the report said the country's sugar mills face an 850,000-ton deficit in production expectations, the Granma newspaper said.

The news came two days after Cuban President Raul Castro fired Sugar Minister Luis Manuel Avila Gonzalez, after the official requested his release because of admitted shortcomings in performance. Avila was replaced by Orlando Celso Garcia Ramirez.

Cuba was once a world leader in sugar exportation, but the industry has faced a steady decline since the collapse of the Soviet Union and the accompanying subsidies that once boosted production on the island nation.

CNN