Why Zimbabwe sugar costs more
BY BUSINESS REPORTER
High input, energy and transport costs, limited milling capacity and outdated regulation are driving up the cost of producing sugar in Zimbabwe, leaving locally produced sugar about 50% more expensive than the import-parity price, a parliamentary inquiry has found.
The price gap exposes deeper competitiveness problems across Zimbabwe’s sugar value chain, where farmers face expensive imported inputs, irrigation and haulage costs while millers operate with limited capacity and competition. The resulting cost structure makes locally produced sugar harder to compete with imports and puts pressure on farmers, manufacturers and consumers.
Local sugar was selling for US$890-US$900 a tonne against an import-parity price of about US$600, according to the Parliamentary Portfolio Committee on Industry and Commerce.
The committee said the price gap was being driven by a combination of production and policy costs.
“Rising input costs, including fertilisers, chemicals, and fuel, have significantly eroded profit margins, particularly for smallholder out-growers who lack access to bulk purchasing arrangements,” the committee said.
Farmers’ representatives told the committee that about 98% of raw materials used to manufacture fertilisers and herbicides were imported from China, South Africa and South America.
Logistics costs, exchange-rate movements and limited access to foreign currency added to the cost of these inputs, they said.
Zimbabwe’s sugar industry covers about 46 000 hectares, with large-scale producers Hippo Valley Estates, Triangle Estates and Mwenezana Estate accounting for about 25 760 hectares, or 56% of the total.
Private and out-grower farmers account for the remaining 20 240 hectares.
Farmers also face high irrigation costs. The committee was told that about 15 megalitres of water are required to irrigate one hectare of sugarcane each year, with the Zimbabwe National Water Authority charging US$6,82 per megalitre.
Electricity is another significant cost for farmers using powered irrigation systems, according to Zimbabwe Sugar Association chief executive Edwin Kondo.
The committee said farmers using overhead irrigation relied exclusively on electricity, while furrow irrigation could use either electricity or gravity.
Transport adds another layer of costs.
In-field haulage is calculated based on an average 10km journey to loading points, with an average five-tonne bundle costing about US$44, according to submissions to the committee.
Some farmers around Hippo Valley use a light train to transport cane to the mill, while others use tractors because of high in-field transport costs.
Road transport costs about US$175 per load, compared with US$8 per tonne by rail, the committee was told.
The structure of the milling industry is another concern.
Zimbabwe has only two sugar mills, both owned by Tongaat Hulett, compared with more than 14 mills in countries such as South Africa and Egypt, according to the committee.
The committee said the concentration of milling capacity weakened competition and affected the bargaining position of out-growers.
Milling inefficiencies are also increasing costs.
During site visits, the committee found that the mills were operating below optimal capacity, while machinery breakdowns, limited technical skills and inadequate investment in modern technology were constraining productivity.
Farmers also reported limited access to extension services and technical support in areas including climate-smart agriculture, pest and disease management and agronomic practices.
The committee said the regulatory framework had failed to keep pace with developments in the industry.
“The committee noted that the Sugar Act is outdated and does not speak to the current operating environment,” it said.
The committee called on the Ministry of Industry and Commerce, together with the Ministry of Agriculture, Mechanisation and Water Resources Development, to expedite amendments to the Sugar Production Control Act of 1964 by October 31, 2026.
It said coordinated reforms and investment were needed to address the industry’s cost pressures and improve its contribution to industrialisation and national development.
