Tongaat Hulett’s sugar production is expected to increase significantly over the next two years, as the company recovers from the adverse conditions, including drought, in the past two years.
Based on good rainfall, the agriculture and agroprocessing business’s South African division is expected to produce 500 000 t to 620 000 t of raw sugar in the 2017/18 year, up from the 353 000 t it produced last year. Output will rise to 680 000 t in 2018/19.
“During the drought, farmers restricted inputs and the replanting of cane, with the extent of the impact on sugar production volumes in 2017/18 still uncertain,” the company said in a statement.
In Mozambique, Tongaat adjusted its outlook to reflect estimated production of 221 000 t of sugar in 2017/18, compared with 198 000 t produced in 2016/17.
For 2018/19, the company foresees production of 280 000 t. “Cane replanting will start as soon as the rainy season ends, which will contribute to the increased production in 2018/19,” it noted.
Below normal rainfall fell during the first half of the summer season for both the Xinavane and Mafambisse regions from October to December 2016, with the irrigation of the sugarcane crop restricted during this period.
However, both Xinavane and Mafambisse have received excellent rainfall since January, with the Muda dam, which supplies the Mafambisse operation, currently being 103% full and the Corumana dam, supplying the Xinavane estate, currently 60% full and rising.
For its Zimbabwe operations, Tongaat foresees sugar production increasing to between 400 000 t and 425 000 t this year. Next year, this will increase to between 535 000 t and 570 000 t.
The two water networks providing water to the Zimbabwe operations are the Tokwe-Mukorsi Mutirikwi network, with 80% and the Manjirenji-Siya Manyuchi network.
The Tokwe-Mukorsi dam was completed in December 2016 and started impounding water immediately. The dam is currently around 65% full with water available to Tongaat Hulett for irrigation of cane.
Meanwhile, in its maize division, Tongaat also expects improved output as weather conditions and rains received during the summer maize season improve.
The starch operations will benefit from the recovery in the South African maize crop, which is currently estimated at 13.9-million tonnes, compared with the previous crop of 7.8-million tonnes.
“The increased availability of maize will contribute to a softening of co-product prices and margin impact in the first quarter of the next financial year,” said Tongaat.