Starafrica pushes for duty on sugar imports

STARAFRICA Corporation says the reinstatement of import duty on refined sugar would positively impact the performance of Zimbabwe’s sugar industry by curbing imports after sales volumes remained unchanged in the year to March 2023.

The Government promulgated Statutory Instrument 98 of 2022, which suspended customs duties on selected importation of basic commodities, including sugar, cooking oil, margarine, bath and laundry soap and petroleum jelly, following extortionate pricing of basic commodities by the retail sector.

The Treasury said, then, that the move was meant to “eliminate harmful and destabilising arbitrage conditions that had pervaded the economy at the expense of the generality of citizens.”

Some observers, however, claimed the policy decision had the potential drawback to some of the milestones achieved in scaling up local industry production and implored the authorities to take immediate corrective measures.

According to starafrica, sales volumes of granulated sugar produced by GSS during the year to March 2023 were almost stagnant at 82 321 tonnes from 82 500 tonnes sold in the comparative period the prior year.

“The industry sugar sales into the local market remained under pressure from competing sugar imports driven by the then existing suspension of import duty on basic commodities. The group looks forward to the Government reinstating duty on imported sugar, a development which will impact positively on the local sugar industry,” said starafrica board chairman Dr Rungamo Mbire in the group’s statement of the financials for the year to March 2023.

Recently Buy Zimbabwe implored the Government to curb importation of unfortified sugar brands. Buy Zimbabwe general manager Alois Burutsa, said the imported unfortified sugar brands are non-compliant with sections 4 and 5 of Statutory Instrument 120 of 2016 which demand that sugar be fortified with fortificants that have been validated and approved by the Ministry of Health and Child Care.

“Buy Zimbabwe expresses concern over reports that some imported unfortified sugar brands are being sold on the local market in contravention of sections 4 and 5 of Statutory Instrument 120 of 2016 which requires that sugar be fortified with food fortificants that have been approved by the Ministry of Health and Child Care,” said Mr Burutsa.

“To date, compliance tests conducted show that the following brands are noncompliant: Ashna Golden Sugar, Sunshine Brown Sugar, Selati White Sugar, Splendid Brown Sugar, Flair Brown Sugar, Selati Sprinkle Joy Brown Sugar, Evergold Brown Sugar.”

In terms of operations, starafrica recorded a 30 percent growth in revenue for the year to March 2023 to $50,1 billion from $38,5billion in the prior year comparative period driven by strong demand for all of the group’s products.

The group’s operating profit for the year, however, shrunk by 93 percent, to $413 million from $5 billion in the previous year.

The decline was attributed to operating costs and raw sugar price increases in real terms coupled with a spike in the costs of imported chemicals, packaging, and refinery spares. Due to a difficult operating environment, and to ensure availability of adequate working capital, the group did not declare a dividend for the year to March 2023.