Sugar export earnings rise

Malawi’s year-on-year cumulative export earnings for sugar, one of the country’s critical foreign exchange earners, peaked at $48.2 million, a 31.6 percent jump from last year’s $36.6 million, driven by a rise in export sales.
The Reserve Bank of Malawi (RBM) figures contained in the latest monthly economic review show that export sales went up to 86.2 million kilogrammes (kg), 51.6 percent of total sales, this year, from 71.5 million kilogrammes about 59.7 percent of total sales, exported last year.
“Cumulative volume of sales amounted to 178.2 million kilogrammes against 177.5 million kilogrammes sold in a corresponding period last year,” reads the report in part.
Most of Malawi’s sugar exports are done by Illovo Sugar (Malawi) Limited to their regional markets particularly in Zimbabwe, and the European Union (EU) and USA.
A smaller chunk is done by smallholder growers such as Kasinthula Cane Growers Association through the Fairtrade market window in the UK.
Sugar alongside tobacco, tea, coffee are some of the export commodities through which Malawi earns its foreign exchange critical for the purchase of fuel, agriculture inputs and medical drugs.
The central bank report says sugar output in August stood at 50.1 million kg in 2013, a slight drop from 51.3 million during the same period last year.
“The volume of sales during the review month was however higher and amounted to 41.3 million kilogrammes, an increase of 19.0 percent from 34.7 million kgs sold in corresponding month last year,” says the report.
Exports in the month were recorded at $13.8 million, relatively higher than $10.4 million earned in August 2012.
But cumulatively, the volume of sugar output, from January to August 2013, amounted to 178 million kgs, a drop of 5.5 percent from the 188.4 million kilograms produced in a similar period in 2012.
In the six months to September 2013, Illovo has just a 32 percent jump in half year revenue of K40.9 billion, despite its operating profit remaining static at K14.3 billion.
But Illovo said for the full year, expected sugar demand on the local market will be fully satisfied with total anticipated sales of 160 million kgs, slightly above that of the previous year.
“For the full year, regional sales are expected to be down compared to the previous year and exports to the EU and USA slightly up on the corresponding period,” said the Malawi Stock Exchange (MSE)—listed sugar manufacturer, in the latest financial statement.
The company is working flat out to recover the slow start of operations experienced at the beginning of the harvest season and ensure that Nchalo [in Chikhwawa] and Dwangwa [ in Nkhotakota] harvest and crush all available cane to achieve a full year sugar output of around 290 million kgs, slightly down compared to over 300 million kgs last season.n