BREXIT WON’T AFFECT SUGAR EXPORTS IN SHORT TERM

BREXIT WON’T AFFECT SUGAR EXPORTS IN SHORT TERM

The Eswatini Sugar Association (ESA) can heave a great sigh that the ongoing processes to exit the United Kingdom (UK) from the European Union (EU), Brexit, cannot affect sugar sales to the UK, only in the short term. The EU
market is readily available and is not threatened. Efforts are ongoing to ensure market access remains intact even in the medium and long term in the event of UK’s breakaway from the European Union, with means not only made by the Kingdom of Eswatini but the entire SACU region including the Republic of Mozambique. Effectively, both the UK and EU will continue to import products from Southern African countries, including Eswatini thus influencing the international economic structure. Performance of the sugar sector is primarily influenced by movements in the global sugar landscape, issued economists attached to ESA. Only the current surplus situation in the world sugar balance is expected to keep world sugar prices low; meaning low returns on export sales and a risk of increased low-priced imports into various preferential markets, including the domestic SACU market. The economists said however, there were signs of reduced surplus or even deficit going forward, which might help in the recovery of world sugar prices. Sugarcane production reached a record 6.2 million tons in 2018, representing a 15% increase
from the previous season. The value of the sugarcane increased only marginally due to depressed sugar prices
in many of the major export markets. Brexit was due to occur on March 29, 2019, two years after it started
the withdrawal process by invoking Article 50 of the EU’s Lisbon Treaty, but the agreement reached between
the EU and UK was rejected three times by the UK Parliament. EU leaders agreed to extend the Article 50 process further and the Brexit date was April 12, 2019. However, British Prime Minister Theresa May again requested an extension until June 30, but further bade for October 31.

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