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Oliver Kazunga, Senior Business Reporter
DELTA Beverages says it has reduced by 70 percent the hectarage for red sorghum under contract farming to 3 300 ha for the 2015/2016 season compared to 11 000 ha contracted the previous season.

According to the company’s website, corporate affairs manager Mrs Tsungi Matiure was quoted by FinX as saying the reduced contracted hectarage will see the group spending just below half a million at $450 000.

“Our investment will be significantly reduced compared to last year because of the reduction in contracted hectarage. We anticipate to finance the sorghum scheme to the value of $450 000,” she said.

Mrs Matiure said the main benefit from the scheme relates to the company providing an assured market to sorghum farmers, which also involves market contracts for white sorghum.

She said the total value of the sorghum purchased during the 2014/15 season is estimated at $2,5 million.

Delta’s annual contract schemes are determined by projected beer volumes but the business has not been spared by the liquidity challenges, which has seen volumes declining.

For the second quarter to September 2015, the group’s sorghum beer category recorded a volume decline of 12 percent for both the quarter and the six months.

Traditionally, under the red sorghum scheme, an average of 9 000 farmers benefit and with an average of six household members, the programme has more than 40 000 beneficiaries.

Communal areas that benefit from the scheme include Buhera, Gokwe, Mutoko, Mwenezi and Chiredzi.

The commercial sector covers Mazowe Valley, Chinhoyi, Raffingora, Selous and Kwekwe.

Sorghum is a raw material used in the production of opaque beer such as Chibuku and Chibuku Super while some is used in the Maheu business.

In an unaudited financial statement for the year ended September 30, 2016, Delta Beverages indicated that the trading environment continues to be constrained by depressed consumer spending, limited access to cash and the generally weak macro-economic performance.

“The shortage of foreign currency, though supporting demand of local products, is significantly impacting the sourcing of critical raw materials.

“There is an emerging risk on water supply due to depleted dam and ground water sources. This may lead to disruptions to production,” it said.

During the period under review, it said sorghum beer volume increased by six percent on prior year. The contribution of Chibuku Super remains strong.

@okazunga