Africa-Press – Eswatini. The Southern African Development Community (SADC) sugar industry is well-placed for modest growth of 7 per cent in the year ahead, owing to increasing demand of the commodity.
This is contained in the Eswatini Sugar Association’s annual integrated report. This, in turn, will place the country in the right position to grow its economy, since sugar is one of Eswatini’s main export commodities, and sugarcane accounts for about 30.5 per cent of the country’s agricultural output. Eswatini is Africa’s fifth largest sugar producer and the largest net exporter. Globally, she is the 28th largest producer and the 8th largest net exporter. The sugar industry contributes significantly to employment of emaSwati and is a vital contributor in the country’s economy, generating over E6 billion in revenue a year, E1.6 billion of which is hard currency earnings. “There is a significant potential to increase the existing regional trade through a number of trading blocs; specifically SADC, Common Market for Eastern and Southern Africa (COMESA), and the relatively newly established African Continental Free Trade Area (AfCFTA), which offers potential growth in intra-African trade and investment,” reads the statement in part.
Markets
The industry also aims to continue working with Government, to improve preferential access to Eswatini sugar to other parts of Africa through, the Tripatite Free Trade Area (TFTA), which aims to combine the SADC, COMESA and the East African Community (EAC) markets, as well as through the AfCFTA. The Southern Customs Union (SACU) currently offers good and sustainable value for Eswatini sugar, but challenges remain. There are threats of the market being susceptible to low priced imports, either due to special import regimes allowed for non-sugar producers in the region, or general market protection being eroded by a lower sugar import tariff. Also, the South African Sugarcane Value Chain Masterplan, contains a specific intent to reduce sugar imports in South Africa, and encourages domestic consumers to buy local. This continues to pose a threat to Eswatini sugar sales into the SA market. A further difficulty is posed by the SADC sugar-producing states, who are advocating for increased market access into the bloc. The Eswatini sugar’s advantage however, is that it continues to be competitively priced and thus, remains an attractive option for most sugar users in SACU.
Ability
Moreover, the European Union (EU) and the United States of America (USA) are Eswatini’s primary export markets, outside of the African region. However, as these markets are mainly supplied with raw bulk sugar, they face increased exposure to volatile world market prices, thus threatening the country’s ability to attain premium prices for local sugar. Efforts to increase the volumes of direct consumption and specialty sugar sold into these markets are ongoing, as these attract premium prices.
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