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IT’S NOT GLOOM FOR ESWATINI SUGAR INDUSTRY

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  MBABANE - Although world sugar prices have fallen, and prospects are bearish in the short term, they will not remain so.


The Royal Swaziland Sugar Corporation (RSSC) in its annual report (2018) reported that this was more so because global consumption even on a conservative basis was still growing at 1.3 per cent per annum (2.4 million tonnes).


The corporation said with available capacity being utilised, new capacity would be required in the early 2020s, which, with extended investment lead times, amounts to short-term rather than the medium-term investment.


conservatively


“Prices will need to be attractive enough to encourage this to occur. The EU market will still need some sugar from reliable, quality supply sources such as Eswatini. In our projections at RSSC, we have conservatively assumed a modest premium over the No. 11 price for both EU and world market sales,” read the report in part.


It was explained that while Southern African Customs Union (SACU) prices should recover once new tariffs take effect, hopefully towards the end of 2018, premiums on regional prices were also expected to recover.


demonstrate


“While the US quota continues to demonstrate high prices, exchange rates should soften going forward,” said RSSC.
It was also mentioned that due to favourable soils, climate and water availability, the Eswatini industry had been consistently ranked among the top 10 low-cost producers in the world.
“It produces in excess of 600 000 metric tonnes of sugar per year, employs over 35 per cent of the agricultural workforce and in 2005 contributed 18 per cent of Gross Domestic Product (GDP),” mentioned RSSC.


It was also stated that following the developments in the European Union (EU) market, SACU, comprising South Africa, Botswana, Lesotho, Namibia and Eswatini, was the most important market for the Eswatini sugar industry, accounting for between 45 per cent and 70 per cent of the country’s sugar sales.
RSSC recounted that EU has historically accounted for between 24 per cent and 55 per cent of Eswatini sugar sales depending on the season, and falls under the EU/SADC Economic Partnership Agreements (EPA).

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