NEW SUGAR CANE LEVY ON GROWERS

MBABANE – The going is getting tougher. Sugar cane growers have been imposed with a new levy that will come into force in April.

In exercise of powers conferred by section four of the Cane Growers Act of 1967, Minister of Agriculture Jabulani Mabuza announced that the levy would be deducted by millers from the periodic payments made to such grower for sucrose supplied by that grower.

Mabuza explained that these amounts would be remitted to the Eswatini Cane Growers Association by the due date.
“The levy shall be at the rate of E6.28 per tonne of sucrose supplied to, and accepted, by a miller during the period of April 1, 2019 to March 31, 2020,” reads legal notice number 242 of 2018 dated December 21, 2018.

The minister mentioned that the due date of the levy in respect of each delivery of sucrose during any mill-month would be the 10th day after the last day of such mill month.

It was clarified that in the absence of satisfactory proof to the contrary, the miller would be deemed to have accepted sucrose on the date of delivery of such sucrose to them.

“For the purpose of this notice, the expression ‘mill month’ has the meaning assigned to it by the schedule to the Sugar Act No. 12 of 1967,” said Mabuza.
It should be mentioned that the Kingdom of Eswatini mulls a subvention to sugar companies with a view to make the price of locally produced sugar to be more competitive in global markets.

This move, which could be implemented should resources allow, would be intended at lessening the effect of cheap imports from non-Southern African Customs Union (SACU) States which displace locally produced sugar, prompting stock to either be kept or sold at low value to world markets.

The Ministry of Commerce, Industry and Trade previously said that it was government’s intention to support sugar producing companies in whatever way possible in order to attract maximum value from ‘Swazi Gold’.

It was disclosed that government provides support to the sugar industry which includes, but not limited to, lobbying and securing markets both within the Southern African region and globally.

Eswatini sugar sales to the European Union (EU) fell by 36 per cent.
This was both as a result of loss in value in that market as well as the abolition of the EU production quotas in October 2017, which led to the EU market becoming self-sufficient.

In the 2017/18 integrated annual report, SSA Chief Executive Officer (CEO) Phil Mnisi disclosed that the (SACU) market, which is the market for the largest share of SSA sugar, saw a drop of 13.5 per cent in the volumes sold into that market.

Response

“This was mainly in response to the market being saturated by imports from the world market,” previously said Mnisi. 
The CEO stated that revenues dropped by 8.8 per cent from E4.6 billion to E4.2 billion.
He said the decrease in revenue was mainly attributable to unfavourable market conditions which resulted in decreased sales and depressed market prices in all markets.

The strengthening of the Eswatini Lilangeni against   major   currencies   in   which   export   sales were denominated also played a role especially in the last quarter of the financial year.

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