Sugar cane producer, Hippo Valley Estates recorded a significant decline in sugar cane production in the nine months to December 2021, due to a reduction in harvest areas and weaker crop growth due to unfavorable weather conditions.
Cane harvested for the period under review was 14 percent down at 897 334 tonnes against 1 043 774 realized same period prior year.
In its trading update to December, the company said this was due to “a combination of a 3% reduction in area that was available for harvest and a 11% drop in cane yields, due to insistent cloud cover during the past rainfall season, which constrained cane growth during the peak growing period.”
The company says the completion of Kilimanjaro and other projects will significantly increase sugar production to meet increasing local demand at the back of a growing population and recovery of the beverages industry, with surplus for export.
The 4000 hectares new cane project (Kilimanjaro) being developed in partnership with sister company Triangle Ltd,project has been stalled by lack of clarity on land tenure which is necessary to concluding funding arrangements with financial institutions.
700ha of the Kilimanjaro Project has been set aside and allocated to new farmers by Government as part of the on-going empowerment initiatives by Triangle Limited and Hippo Valley Estates Limited.
Cane deliveries from private farmers were however 30 percent above the same period in prior year due to a 21 percent growth in yields and a 9 percent increase in area harvested, benefiting from prior year carryover cane.
While private farmer yields were approximately 20 percent below those on the Company’s plantations, the positive trajectory from prior years was commendable.
“While total cane milled remained stable, sugar production for the season under review increased by 2 percent from prior season due to an improved factory performance, following a successful prior crop maintenance program,” said Hippo.
Hippo Valley’s share of total industry sugar sales volume of 317 155 tonnes against 356 367 tonnes in 2020 was 53.59 percent from 49.95 percent prior year.
While local market foreign currency inflows were firm at the beginning of the period under review, they have subsequently slowed down owing to exchange rate dynamics within the market.
The Company still awaits finalization of the 99-year lease relating to Hippo Valley North (23 979 hectares).
