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Tongaat funding boost for Zim sugar farmers

Victoria Falls - Sugar cane farmers in Zimbabwe have received funding facilities amounting to US$32m from regional banking group BancABC and sugar producer Tongaat Hulett, while a new facility is to be offered by the bank before the end of this year.

Experts and officials said during a conference of Southern African Development Conference (Sadc) sugar producers in Victoria Falls on Thursday that rising imports of cheap sugar are disturbing market and demand trends. However, one resolution that emerged from the conference was that producers need to ramp up their production.

The sugar producers and some financial institutions have now come forward with funding initiatives to help boost the capacity of private farmers to raise cane production volumes. Muchadeyi Masunda, the chairperson of the Zimbabwe Sugar Association, told the conference that BancABC will offer a $30m package for the sugar cane farmers.

Brazil and India are reportedly dumping cheap sugar in southern African markets, thereby depriving local producers of markets.

“We are pleased to announce that we have struck a deal with financiers-BancABC financing new farmers who have no collateral. BancABC put in $30m and now want to bring another facility,” said Masunda.

However, he did not disclose finer details of the other funding facility that BancABC is set to make available although Terrence Mapfumo, an executive with the bank, said it will be signed before the end of the year. The sugar producers' association says it is engaging other funding partners to help raise production capacity and cane feeds to the country's mills.

Sydney Mutsambiwa, the CEO of Hippo Valley which is controlled by agriculture processing group Tongaat Hulett, said on Wednesday that Tongaat had already invested more than $6m into boosting private farmers. He added that an additional $2m was being offered into its ambitious private farmer cane growing scheme this year.

Zimbabwean sugar producers have a quota system agreement in place with the European Union which allows the country to export up to 200 000 tonnes of the commodity into the eurozone. The remaining 300 000 tonnes of sugar is consumed on the local market.

Currently about 16 000 hectares of cane is grown by private farmers in Zimbabwe, while Triangle and Hippo Valley farm on about 29 000ha, with the latest funding facilities likely to bring up the private farmers’ contribution to overall sugar production by about 160 000 tonnes per year, according to officials.

Tongaat Hulett has however 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.

 - Fin24
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