Sugar output may drop 10%

Illovo Sugar Malawi Limited says it expects sugar output at its Nchalo Estate to drop by an average of 10 to 15 tonnes per hectare this year. Illovo has attributed the situation to the dry spell that has hit most parts of the country coupled with siltation and low water levels in some rivers which the company says has impacted on sugar output.

Nchalo Estate Agriculture Manager Keith Demleo said in an interview on the sidelines of a tree planting exercise the firm held on Friday in Chikwawa district that prospects of a drop in output was inevitable as the dry spell has also worsened the situation.

“Our crop has dropped in the region of 10 to 15 tonness per hectare of cane. The dry conditions together with the low water levels have affected our crop; this is what we are losing at the moment,” said Demleo.

He further said the situation would also likely affect the company’s earnings and its contribution to the country’s gross domestic product.

“It depends on when the sugar is sold, but if you take 10 tonnes a hectare, that would be about a 140,000 tonnes of cane, which is quite a substantial reduction in relation to revenue to us and even to the country because we earn foreign exchange for the country as well,” said Demleo.

At the beginning of the year, Illovo Sugar Malawi said sales of is sugar on the local market had also gone down by 40 percent as a result of increased smuggling of the commodity into the country.