Sugar boosts Malawi's economy

Reports show that sugar has replaced tea as the Malawi's second highest forex earner. Under the European Union's `Everything But Arms' trade agreement, which provides for preferential quotas of various trade goods from 49 Least Developed Countries (LDCs), sugar has landed new markets in Europe, expanding

The country's sole local sugar manufacturer is the Sugar Corporation of Malawi (Sucoma,) a subsidiary of the South African-- based Illovo group. The management at Sucoma has praised government for banning cheap sugar imports from neighbouring Zimbabwe flooding the market that had depressed prices and impacted on Malawi's cane growers.

Sucoma has released a trade update that says the smallholder cane industry is expected to grow by 10% to 210,000 tonnes of sugar in the next three years. As a result, sugar exports will further encourage production at smallholder level. The company is currently pursuing new export markets both in the region and abroad as a hedge against geographic and currency risks.

Sucoma has two sugar mills, at the Dwangwa sugar estate in central Malawi, and Nchalo Estate at Chikwawa in southern Malawi. The two mills are expected to process 230,000tons this year. The smallholder schemes in Chikwawa and Dwangwa currently constitute 10% of the total cane Sucoma buys from farmers each year.

Sucoma's managing director, Brett Stewardson, is convinced that smallholder cane production in Malawi was now a well-- organised sector thanks to the ongoing partnership between farmers and the company. A total of 556 farmers directly participated in the scheme, having been trained in growing high quality cane using modern agricultural practices.

"Apart from providing income to farmers the schemes have acted as a catalyst for development around the communities as they have given birth to other service industries like transport, contracts, labour and food," says Stewardson, adding that cane production supports over 10,000 people at Kasinthula and Dwangwa. Sucoma, which is listed on the Malawi Stock Exchange, announced that the sugar industry has overcome global economic recession to emerge among the 10 top industries of the world.

Malawi's sugar exports have doubled from 25% since 1997, and Sucoma is currently one of local economy's major tax payers with a turn-over of K5.5bn expected this year. Funding to facilitate higher production among smallholder farmers has also encouraged the growers. Although Sucoma had in the past helped farmers with inputs as a form of partnership, growers complained that the provisions had been minimal. They were also looking for higher cane prices from Sucoma.

Yohane Zambaza is a cane grower from Chikwawa who has tendered his small plantation for over 10 years. He speaks well of the new initiative saying there had been improvement in technical assistance on the best growing practices of cane. He says: "Many of our villagers have are decided to grow sugar cane, and are already looking for wider pieces of land. But my most sincere prayer is that Sucoma can raise the price at which they buy our cane."

By Hobbs Gama