South Africa sugar output falls to lowest since 1953 on drought

The "extreme drought" in KwaZulu-Natal has led to a reduction in the sugar crop and higher costs per ton produced

SUGAR production in SA fell last year to its lowest since 1953, hitting earnings at Tongaat Hulett and Illovo . The "extreme drought" in KwaZulu-Natal has led to a reduction in the sugar crop and higher costs per ton produced, writes Hopewell Radebe.

Sugar production fell to 445000 tons from 564000 tons previously. However, SA’s neighbours enjoyed a bumper crop and boosted their contribution to the bottom lines of Africa’s biggest sugar companies.

Less favourable exchange rates affected realisations in the Mozambi can local market and exports from SA were constrained. "Favourable prices were achieved on exports from Mozambique and Zimbabwe into the European Union and the US," Tongaat Hulett CEO Peter Staude said .

Zimbabwean sugar operations increased production by 29% and output in Mozambique grew by 24% .

Illovo Sugar said yesterday its growth strategy of having diversified operations across Africa offset poor sugar production in SA .

Notwithstanding a rain-interrupted season in Zambia, record cane production was achieved and , together with increased output in Tanzania, this more than offset significant cane supply losses in SA , Illovo MD Graham Clark said yesterday.

Illovo planned to sell its excess electricity to Swaziland’s national grid at a market-related price. The project has an agreement with the timber industry to supply wood chips in case it runs out of its own biomass to mix with sugar cane residue bagasse to generate eco-friendly electricity.

source: businessday