The country’s sugarcane industry did well in the 2023 season despite challenges in terms of production volume. Most importantly, the industry anticipates a positive outlook for the 2024 season.
The industry’s turnover for the 2022 season was a staggering E6 billion, and the forecast is similar to revenues for the 2023 season.
Despite the positive outlook, farmers are warned to make hay while the sun shines and increase savings during the season of boom as the world sugar market is volatile and could swing the other way.
These are the words of Banele Nyamane, the CEO of the Eswatini Sugar Association (ESA) when giving insights into the industry as the season folds, and preparations for the 2024 seasons are underway.
He was speaking during an agribusiness breakfast meeting organized by Standard Bank Eswatini recently in Big Bend, bringing together farmers, small and medium sized enterprises, and service providers in the agriculture sector.
Nyamane confirmed that the turnover of the industry was E6 billion. He added that the industry was unsuccessful in reaching the production target of 700, 000 tons it had set for itself for the 2023 season. The industry only reached 591, 700 tons of sugar for this season.
“This was due to a combination of negative factors, among them climatic, that were joined by operational disruptions because of a strike that once happened at Ubombo Sugar Limited. Then there were interruptions in production that occurred last year because of heavy seasonal rains and flooding,” Nyamane said.
“That meant we suffered delays and were pushed into late harvesting for the last production year. We ended up harvesting into January 2023. The unintended effect is that the sugarcane that was harvested and sent to the millers was too young because sugarcane requires 12 months to mature. Fortunately for us, the world sugar price is on a rally upward, currently hovering around E10,800 per ton.”
“So, what we have lost in terms of volume, we have significantly compensated for in price. We, are therefore, confident as an industry that our members should be well compensated,” Nyamane said.
The ESA is an umbrella organization mandated by the Sugar Act 1967 to bring together all growers and millers of sugarcane, perform the regulatory function, market both the sugar and molasses produced by the industry, and distribute all proceeds to the members based on an agreed formula.
For the 2022/23 season, there were 438 growers, 411 of whom are smallholder sugarcane farmers, and three millers, Ubombo Sugar Limited, and RES Corporation which owns Simunye and Mhlume mills.
“The industry has already taken the pain this year to correct all the issues related to the crop. So next year, 2024, we are very optimistic that the volume will recover, and the price is expected to remain for the most part, where it is,” Nyamane said.
The target for the 2024 season is a minimum of 800,000 tons.
“If we had not decided to harvest the sugarcane this year and waited for it to mature, then the cane would be too old, which also compromises yields.”
He explained that the crop harvested in October 2023, would allow for planting to take place, and next October 2024 the growers will take the sugarcane to the millers for processing. Nyamane said the crop would have matured enough having reached the age of 12-months.
“Our advice to the sugarcane farmers, and the agriculture sector in general, is for them to continue with proper crop husbandry and follow all the guidelines that are provided by the ESA and other professionals. This will place us in good stead to have the quality product we anticipate having at harvest time,” Nyamane said.
He said the ESA will continue to educate the growers about what to do around pests, diseases, and water management with regards to the anticipated El Nino fuelled drought.
Referring to the breakfast meeting organised by Standard Bank, Nyamane said they appreciate the comprehensive and tailor-made financial solutions that the bank has availed for farmers, entrepreneurs, and SMMEs in the agribusiness sector.
He added that the meeting was also a golden opportunity for the sugarcane industry, and the agriculture sector in general, to update the Bank about developments and emerging trends in the respective sectors.
“We were able to give Standard Bank Eswatini a proper outlook on the industry. In return, the Bank assured us that they will continue to support our members through the provision of working capital and other requirements,” Nyamane said.