Sugar cane & macadamia farms achieve high investment return - CNBC Africa

Sugar cane & macadamia farms achieve high investment return

Southern Africa

by Trust Matsilele 0

Sugar cane and macadamia farms achieve high investment return. PHOTOS: africagreenmedia

The improved demand in sugar cane has seen a sharp a drop in available farms within South Africa's Mpumalanga region.

(READ MORESub-Saharan Africa at the sweet spot of sugar production)

Gerhard van Niekerk, Pam Golding Properties area principal based in Nkomazi says a huge demand for sugar cane farms and land suitable for the soft commodity has resulted in a major shortage of stock.

“Some 30 per cent of South Africa’s total sugar output is produced by the three Remgro-owned TSB mills, of which one is situated near Malelane and another near Komatipoort - both within Nkomazi,” added Van Niekerk.

In 2004, sugar cane land in these areas sold for 40,000 to 55,000 rand per hectare. Now, 10 years later, it is selling for 100,000 to 200,000 rand per hectare, reflecting an extremely healthy increment of 13 per cent per annum compounded.

“The Nkomazi area is attracting existing cane farmers in KwaZulu-Natal, while local farmers, realising the need to apply economies of scale to maintain profit levels, are also looking for opportunities to expand,” added Van Niekerk.

“However, these farms are hard to come by, with realistically priced sugar cane farms that do come onto the market selling in a very short period of time,” he says.

Pam Golding Properties recently sold a small sugar cane farm comprising 29ha near Malelane, which fetched 193,000 rand per hectare, and is currently marketing a 230ha mixed sugar cane/sub-tropical fruit/vegetable farm on the market at a well-priced, competitive asking price of 28.5 million rand.

Covering the area between the Kruger National Park, Mozambique and Swaziland, the Nkomazi District is 4,787 square kilometres in extent and also includes the towns of Hectorspruit, Kamhlushwa and Kamaqhekeza. 

Agriculture in Nkomazi is not possible without sufficient irrigation water and the stabilisation of the three main rivers had a significant, positive impact on production.

“The Crocodile River is stabilised by the Kwena Dam, the Komati River by the Driekoppies Dam and the Lomati River by the Maguga Dam, with the three dams collectively providing 741 800 000 cubic metres of water,” said Van Niekerk. 

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