ESWATINI SUGAR MARKETS STILL ASSURED
ESA CEO Phil Mnisi

ESWATINI SUGAR MARKETS STILL ASSURED

While sugar production in -creased 15 percent last year compared to the previous year, the growth could not be matched by the value of sugarcane sales as prices remained depressed in many of the major export markets, resulting in marginal growth. ESA Public Relations Officer (PR), Corporate Social Investment (CSI) and Communications Specialist, Thabile Maripe, said Eswatini Sugar Association (ESA) sugarcane production grew to 6.2 million tons in 2018, representing a 15% increase from the previous season. “However, the value of the sugarcane increased only marginally due to depressed sugar prices in many of the major export markets,” said Maripe. Minister for Finance Neal Rijkenberg made a similar observation when delivering his budget speech in February. Maripe said the
performance of the sugar sector was primarily influenced by movements in the global sugar landscape. “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,” she said. She said there were signs of a reduced surplus or even a deficit going forward which might help in the recovery of world sugar prices, adding that there are no immediate risks to preferential markets where
Eswatini sugar is sold, including in the United Kingdom where there are ongoing processes to exit the European Union (Brexit). “Preferential market access is therefore deemed assured into the medium and long term,” said
Maripe. She added that risks to sugar demand included anti-sugar health campaigns and the sugar tax being
introduced in most countries. This would affect both the sugar demand and the sugar prices as more sugar may be available against reduced demand by manufacturers of sugar-added products, she said. “The industry has been working with the European Union (EU) and other stakeholders, such as ESWADE, on the progress of ESA’s change program from sugarcane to promote agriculture diversification as a way of reducing reliance on the sugarcane crop as well as expanding business opportunities for industry growers,” said Maripe. She said during the recent drought conditions of 2014 to 2016, the industry continued to encourage its growers on the initiative to produce dry white maize crop to contribute to food security in the country. She said by March 2016, a total of 138.6 hectares of land had been planted in LUSIP 1 and KDDP projects. The ‘High Value Crop and Horticulture Project’ (HVCHP) is also being
implemented through ESWADE and NAMBOARD, targeting to produce high quality horticultural crops. The industry has also seen the production of other crops, such as maize, beans, potatoes and vegetables by large-scale sugarcane growers, such as the United Plantations (PTY) Ltd and RSSC during the drought years. On the other hand,
the average sugar selling price has been on a downward trend since 2016 when it reached its peak due to the sugar shortages as a result of the drought that was experienced in the region. “This downward movement has been linked with the low world sugar prices during the period and the low level of protection from imports in the domestic markets, forcing domestic prices to remain low. The expected recovery in world sugar prices is expected to help the
average sugar selling price to move up slightly, explained Maripe.

Leave a Reply

Close Menu
×