BREXIT: ESWATINI SUGAR, BEEF INDUSTRY TO SUFFER

MBABANE – Eswatini’s sugar and vegetable exports to the United Kingdom could be put under strain should Brexit see the light of day.

An economist has advised that there remains a strong likelihood that producers could face an extra cost to ensure that their products get absorbed into the UK since there would be no precise agreement which speaks to the importation of local products by the EU.

“Unless we come up with an immediate contingency plan or agreement, the local produce of sugar, beef and other products could suffer greatly because the industry is highly competitive. This could also prompt an increase in costs for local producers who may be compelled to add value in order to make their products more competitive,” said the economist who preferred anonymity.

Exported

Sugar, beef and baby vegetables are among the main products being exported to the EU at present. The vegetables include, but not limited to, leek, baby carrots, asparagus, peas, baby gem, and baby corn.

In the Central Bank of Eswatini 2016-17 annual report, it was explained that export sales destined outside the Southern African Customs Union (SACU) market predominantly to the EU decreased by 20.8 per cent from 299 936 metric tonnes in the 2015/16 marketing season to 237 582 metric tonnes in 2016/17.

This decline resulted from the combination of lower volumes available for sale (due to the drop in sugar production) as well as the continuous market diversification away from the EU market undertaken by the Eswatini Sugar Association (SSA) in light of the erosion of preferential access to this market.
With the advent of Brexit, which is still at negotiation stage, the volumes of produce which enters EU could decline further.

It should, however, be mentioned that Minister of Commerce, Industry and Trade Manqoba Khumalo met with British High Commissioner to South Africa Nigel Casey to discuss the implications of Brexit on the Kingdom of Eswatini. The meeting convened on Thursday was in light of on-going discussions in the United Kingdom regarding Brexit, where Prime Minister Theresa May was focused on a bid to avoid a no-deal scenario.

Discussions

The discussions have temporarily put a pause on the trade negotiations taking place with regard to the Southern African Customs Union (SACU), Mozambique and UK Economic Partnership Agreement (SACUM-UK EPA). 

The aim of the SACUM-UK EPA would be to deliver continuity in terms of trade between SACUM countries and the UK.  The minister learnt that the UK was ready to pick up on the negotiations as soon as a solution to the current Brexit deadlock was found. He was also briefed about a post-Brexit trade agreement with the UK; which was meant to spell out how the Kingdom of Eswatini will trade with the UK following Brexit.

The main objective of the meeting was to ensure that trade relations between the two countries were not disrupted, particularly with regard to the country’s beef and sugar exports.
In the event a solution to the deadlock leads to another Brexit delay, more time would be made available to attend to outstanding issues concerning the negotiations.
 
 

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