Poor EU market conditions hurt Zambian sugar exports


By Davis Mulenga | 13 June 2017
sugar

Zambia Sugar’s exports to the European Union (EU) have dropped by 74% because of poor market conditions, said Zambia Sugar PLC’s managing director Rebecca Katowa.

Katowa said EU prices are significantly weaker than in previous years, resulting in the company cutting down bulk exports to the region. “Prices to the EU have collapsed to a level that is not cost reflective,” she said.

To make up for the decline in EU exports, Zambia Sugar is looking at markets in the region where prices are expected to remain above international levels. This despite increasing competition from other regional producers.

The Democratic Republic of Congo (DRC), Kenya, Mozambique, Zimbabwe and other Southern Africa Development Community (SADC) countries are among the targeted regional markets.

“Regional markets are valuable alternatives to the EU. So we are adjusting favorably by reducing bulk exports to the EU and shifting them into our regional markets,” she said.

On rising production costs, which include increased electricity tariffs, Katowa said the company will maximise the use of alternative energy sources.

“We are working at increasing our own energy source production to avoid burdening the rising sugar production costs on consumers,” she said.