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EU market could double Zimbabwe sugar output

ZIMBABWE can increase sugar output by nearly 50% if allowed greater access to the European Union (EU) market to compensate for expected loss of revenues from planned sugar reforms, an industry of

ficial said.

The EU is planning reforms which will cut preferential prices for sugar from African, Carribean and Pacific producers (ACP) by about 40%, and has proposed more access to offset likely falls in revenue.

Zimbabwe Sugar Association secretary Steve Frampton said on Wednesday that Zimbabwe’s quota would not be reduced as a result of the reforms, but a price cut would still hit the industry hard.

“For us there will be a reduction in prices and we will be happy for any sort of compensation that will come, so we are looking forward to increased access to the EU market,” Frampton said.

“We are saying we have the capacity to expand production to 620 000 tonnes if allowed to increase exports.”

The southern African nation — expected to emerge from a five-year recession this year — has two export preferential agreements with the EU allowing it to sell 56 024 tonnes of white sugar to the trade bloc.

Former European colonies in the ACP — which includes Zimbabwe — supply the EU, the world’s biggest sugar purchaser, with 1,6-1,7 million tonnes of the commodity each year under preferential deals at above-market prices.

The EU has sketched out plans to compensate poor countries for any loss in revenue, but some nations say this may not be enough for producers who export all their sugar and import to meet local demand.

Zimbabwe’s total export figures for 2004 are not yet available, but the country met its EU quota last year and in 2003 exported a total of 124 300 tonnes.

Besides sugar exports to the EU, Zimbabwe also has a 12 000 tonne quota to the United States and ships sugar to India, Malaysia, Egypt, Canada and South Africa.

Sugar production fell 16% to 422 300 tonnes last year after some cane farmers failed to plant because their land had been earmarked for seizure by the government.

In 2000 President Robert Mugabe’s government began seizing white-owned farms in a policy that has disrupted commercial agriculture and been partly blamed for food shortages in the country since 2001.

But he argues that the land reforms were necessary to correct imbalances brought about by nearly a century of colonial rule which saw white farmers getting about 70% of the country’s fertile land.

Zimbabwe’s major sugar producers include Hippo Valley Estates, owned by Anglo American Zimbabwe, itself a subsidiary of miner Anglo American and Triangle Ltd — which is owned in turn by South Africa’s Tongaat-Hulett and Anglo American.

Mkwasine Estates is jointly owned by Hippo Valley Estates and Triangle Limited.

A Hippo Valley spokesman said the sugar producer was negotiating with the government after Mkwasine and its estates were earmarked for compulsory seizure by the government.

Hippo produced 236 116 tonnes of sugar in 2003 and although last year’s figures were not available, the spokesman said production for this year would not be much different from past years. — Reuter.

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