Sweet Spot: Our raw sugar is not expensive, says farmers

Sugarcane farmers have dismissed claims by StarAfrica Corporation that they are supplying sugar at exorbitant prices and under stringent conditions.

Last week, StarAfrica Corporation’s unit Goldstar Sugars closed its Harare branch claiming prices for raw sugar were making it hard for the company to operate at a competitive and viable price.

In a statement, the company’s commercial executive, Revesai Gwenhamo said another reason for closing their refinery is the difficult trading terms, which have constrained raw material supplies to the refinery.

“We have engaged the supplier and look forward to finding an amicable solution to enable us to resume operations as soon as possible. We will keep you informed of progress on the matter,” Gwenhamo said

However, sugarcane farmers have hit back and said they are selling raw sugar at way below cost at US$631/ tonne compared to production cost of US$920/tonne at a time they are not receiving any subsidies.

The sugarcane farmers said they are not receiving any subsidies.

According to the Associations of Sugarcane Farmers, the import parity price (IPP) of raw sugar from Zambia for example is US$632.

The current raw sugar price therefore compares well with the IPP, stated the farmers in a press statement.

They noted that StarAfrica Corporation (SAC) is currently enjoying trading terms of 21 days and an unsecured credit facility of US$3 million.

“SAC is therefore encouraged to approach financiers such as banks to secure further credit facilities should they find the current terms onerous.

“Farmers do not have capacity nor the will to finance working capital requirements for SAC,” the farmers added.

Out growers of sugarcane supply 45 percent of the raw sugar that is sold in the country through Zimbabwe Sugar Sales (ZSS).-ebusinessweekly