The regulatory body notes that currently its sales are concentrated in Eastern and Central Africa, but will use the Tripartite and Continental Free Trade Area agreements as a springboard to venture into other African markets. The SACU market remains Eswatini Sugar Association’s primary market as evidenced by the fact that 67% of sales were destined for this region during the 2021/22 financial year.
By Ntokozo Nkambule
The Eswatini Sugar Association (ESA) says that its intention is to consolidate sales further into the rest of Africa. Currently, sales are concentrated in Eastern and Central Africa. The regulatory body says the plan is to make further inroads into other regions on the continent and to supply any deficits that may exist or emerge.
ESA’s Acting Chief Executive Officer (CEO) Banele Nyamane when responding to this publication pointed out that they are looking at the wider African market as a long-term target. This includes markets in West Africa. He said they would use the Tripartite and Continental Free Trade Area agreements as a springboard to venture into those markets, as discussions have already started on how to structure a sugar trading arrangement.
When asked if they consider venturing into other markets apart from the ones they currently operate in, the Acting CEO had this to say “we are always looking at opportunities to sell Eswatini sugar more remuneratively. Beyond just the African continent, countries with which Eswatini has preferential trading arrangements will always be considered. This includes Taiwan and countries in the Middle East. The relative returns obtained there had not made supplies lucrative at the moment, but this is continuously evaluated and may be possible in the near future. Generally, we consider the global market a potential outlet for Eswatini sugar” he explained.
It is worth noting that the Southern African Customs Union (SACU) market remains ESA’s primary market as evidenced by the fact that 67% of sales were destined for this region during the 2021/22 financial year.
The SACU market comprises Botswana, Eswatini, Lesotho, Namibia, and South Africa, and is classified as a domestic market because of the free movement of goods within SACU. According to the ESA Integrated Annual Report 2022, about two-thirds of that sugar is packed into smaller packages for direct consumption, with the balance being used for industrial and manufacturing purposes.
The association explains that it wants to continue growing the domestic market even though they face certain pressures in the market. “Our intention is to continue to grow our domestic market share in line with increasing consumption. There is ongoing pressure at SACU level for a rebate on duties payable from the non-sugar producers in the region, to allow them to import sugar at lower prices from the world market. Were this to be allowed, it would have an impact on us, as our sugar would be displaced from the SACU region into a less lucrative world market, where prices attained are less than the cost of production. To preserve the value in the market and in the industry, we continue to work with the government to ensure that these players are supplied with sugar at competitive levels” expands the Integrated Annual Report.