Yesterday Huletts the company that produces most of Zimbabwe’s sugar sent out a notice announcing that they were doubling the selling price of sugar to $134 per 2kg pack. Naturally, that was met with dismay by the beleaguered public who are facing multiple price hikes every week even as their salaries remain stagnant. It, however, seems that Huletts had the support of sugarcane farmers.
Farmers, who welcomed the hike, cited the fact that they continue to face increased input costs. It does not help that most inputs are pegged in US dollars even when they are sold in RTGS. Often companies that sell these inputs use the black market exchange rate to adjust their prices instead of the government’s fixed exchange rate.
An example is that as sugarcane growers, input costs have gone up and it is pegged at US$500 to produce a tonne and when we sell that tonne we only get an equivalent of US$273.
So how do we expect us to produce when the production cost is more? We are selling our sugarcane at a price which is below the production cost.Edmore Veterai Chairman for Zimbabwe Sugarcane Farmers Development Association speaking to the Herald.
This hike Mr Veterai claimed might be what is needed to address the sugar shortages that had started creeping in. Most supermarkets have not had sugar on their shelves for weeks. Instead sugar has been selling for $2.50 USD per 2kg on the black market which never seems to run out.