The Eswatini sugar industry experienced another turbulent year, as climate shocks, pest outbreaks, and fluctuations in the global market tested its resilience.
Although there was a slight recovery in output from the previous season, the Eswatini Sugar (ES) confirmed that overall production still fell short of expectations, putting financial pressure on both growers and millers.
According to ES Chief Executive Officer Banele Nyamane, these setbacks highlight the fragile balance of risks and opportunities facing one of Eswatini’s key industries.
“It has been another turbulent year for the industry, one which our people have had to navigate with care and intention, against a backdrop of both opportunities and risks across global and regional markets,” the CEO noted in the association’s 2024/25 Integrated Annual Report.
The industry’s hopes of offsetting lower production through higher international prices were dashed when global sugar prices declined, erasing gains made in previous years. As Nyamane explained, “A downturn in global sugar prices meant that we were unable to offset the lower production volume through higher prices as we managed to do in the past, and our members will unfortunately feel the financial impact.”
Adding to the difficulties, civil unrest in Mozambique disrupted shipping routes through the port of Maputo, while ongoing warehousing issues and supply chain inefficiencies caused ES to struggle for storage space during peak production. These challenges, Nyamane said, underscored the urgent need for agility and rapid corrective measures in an increasingly complex trade environment.
Global Uncertainty
The turbulence in Eswatini reflects broader uncertainties in the global sugar industry. The 2024/25 season is projected to see the largest global sugar deficit in nine years, with a shortfall of 5.5 million tonnes. World production is forecast to fall sharply to 174.8 million tonnes, down from 181.3 million tonnes last season. This decline is driven by adverse climatic conditions, pest and disease outbreaks, and diversion of sucrose into alternative products.
Trade dynamics are also shifting, with both imports and exports expected to decrease—imports by 6.2 million tonnes and exports by 5.4 million tonnes. Global import demand is now set to surpass exports by 0.2 million tonnes, further tightening the market. “The international sugar market will remain volatile in the face of shifting developments in global trade,” the ESA report stated.
Perhaps the most urgent issue is the ongoing decline in cane and sucrose yields across the industry. Multiple factors, including climate change, poor management practices, and cane genetics, have contributed to this downturn. The consequences, Nyamane warned, could be severe.
“Diminishing yields mean lower production, reduced income, and decreased profitability. This, in turn, will threaten the industry’s viability and sustainability,” he said.
Growers facing lower returns might be tempted to abandon cane farming altogether and switch to alternative crops. This could weaken the competitiveness of the industry both locally and internationally.
Increased Proceeds despite Challenges
Nevertheless, Eswatini Sugar has not remained passive. ESA strengthened relationships between millers and growers, conducted trials in new export markets, and expanded its presence in existing markets. It also began addressing initial problems with new products. These efforts enabled ES to increase distributable proceeds to members by E735 million—reaching E7.3 billion—despite the challenging environment. In 2024, distributable proceeds were about E6.5 billion.
On the sustainability front, ES achieved Bonsucro Chain of Custody certification, a milestone that enhances the industry’s competitiveness in global markets. A framework is also being developed to extend certification to more growers, increasing the volume of sustainably produced sugar.
Future Outlook
Nyamane acknowledged that the outlook for 2025 remains difficult, with shifting global trade policies and unpredictable sugar prices creating new uncertainties. However, ESA plans to reduce risks through foreign exchange cover and strategic hedging.
“I anticipate a tough year ahead, but I am confident that our strategies and competencies, combined with the industry’s resilience, will serve us well,” he said. “Together we will succeed in strengthening our industry, securing its long-term viability and sustainability, and maintaining the Eswatini sugar sector’s role as a vital contributor to the national economy.”