By Alois Vinga
SUGAR processor Hippo Valley took advantage of the policy directive allowing foreign currency sales to supplement its offshore earnings, a strategy that in part boosted the company’s sugar sales by 53.5%.
Presenting the group’s results for the period ended December 31, 2021, Hippo Valley Chairman Canaan Dube said that foreign currency sales have been adopted as a complementary tool.
“While the availability of foreign currency at the official exchange rate remains limited, the industry is taking advantage of the multi-currency regime to generate foreign currency in the local market to supplement offshore earnings,” Dube said.
Such strategies have been necessitated by sweeping measures that have been put in place by the Reserve Bank of Zimbabwe allowing businesses and the public carrying out transactions to use free funds under Statutory Instrument 127/2020.
During the review period, Hippo Valley’s share of the industry’s total sugar sales volume reached 317,155 tonnes, while the industry’s total domestic sugar sales for the same period, at 285,548 tons, were 10% higher than the same period of the previous year, thanks to strong local demand and improved supply.
“Price realizations in the local market, in local and foreign currency, have remained firm in terms of current purchasing power. While currency inflows into the local market were firm at the start of the review period, they subsequently slowed down due to exchange rate dynamics within the market,” Dube said.
The company also lamented the reduction in COMESA’s export quota for the year to Kenya, which saw export sales volumes cut by 68% to 31,607 tonnes.
“The volumes initially intended for the Kenyan market have been redirected to the local market to meet strong local demand. Efforts are underway to develop other regional markets to reduce the risk of concentration in the Kenyan market. The country’s annual export quota to the United States of America remains secure and fully satisfied,” he said.