Report Coverage
This report focuses on the sugar industry in Eswatini and includes information on the state and size of the industry, the major players, developments, corporate actions, regulation and other influencing factors. There are profiles of four companies including Royal Eswatini Sugar Corporation, listed on the stock exchange and part-owned by South African RCL Foods, Ubombo Sugar, which majority owned by Illovo Sugar, locally-owned Tambankulu Estates and Crookes Plantations, part of the South African Crookes Brothers group.
Introduction
Eswatini is Africa’s fourth largest sugar producer and the 25th largest producer worldwide. Sugar is Eswatini’s main export commodity and accounts for over half of the country’s agricultural output, and it contributes about US$285m per year to the economy. The United States Department of Agriculture (USDA) forecasts that sugarcane cane production will grow by 1% in 2021/2022 to 6.1 million tonnes (MT) from 6.0MT in 2020/2021. Sugarcane is grown under irrigation in the lowveld of the country on 57,000 hectares (ha) of land. On average 5.5MT of sugarcane is refined into 670,000 tonnes (t) of sugar on average per year, and approximately 20,000 workers are employed. The industry is regulated by Eswatini Sugar Association, an umbrella body of all growers and millers of sugarcane, which markets and sells all sugar and molasses produced in the country.
Strengths
• Access to preferential markets.
• Close proximity to the largest regional markets that include South Africa.
• Eswatini is a globally-competitive producer of high-quality sugar.
• Good and continuous support from the government.
• High productivity in cane growing.
• Provision of extension services particularly to small scale cane growers.
• Sugar industry is a significant contributor to economic growth and development.
• Technically efficiency in sugar production.
Weaknesses
• Deficiencies and inefficiency of public utilities, with their related high costs.
• Increasing costs of sugar production.
• Increasing inefficiency of smallholder farmers in growing cane.
• Inefficient infrastructure and high transport costs.
• Negative export conditions due to high tariffs, import taxes and lack of subsidies.
• Reliant on favourable weather climate.
• Skills shortages.
• The global sugar price is affected by subsidy-induced overproduction in some major sugar-producing countries.
Opportunities
• Diversification into other sugar-based products.
• Generation of renewable electricity.
• Nurturing regional demand.
• Potential of supplying all world markets.
• Production of ethanol.
Threats
• Expropriation of land and possible decrease in sugar cane production.
• Global lower sugar prices.
• Oversupply of sugar in some global markets.
• Removal of restrictions for domestic sugar production in the EU.
• South African Sugar Value Chain Master Plan affecting export prices into South Africa.
• The introduction of sugar tax in many countries.
Outlook
Global growth of the industry will depend on consumption growth, and in Europe and the Americas, consumption is expected to be flat or falling. Falling export prices pose the biggest threats to Eswatini’s sugar industry. The industry has witnessed a decline in exports to some its lucrative markets such as the EU, and this trend may continue as more countries impose sugar taxes due to health concerns. Volatility, changing weather patterns, economic uncertainty in some export markets, environmental issues, new legislation and threats to exports into South Africa posed by the South African Sugarcane Value Chain Master Plan will increase risks for the industry. Good rains in 2020/2021 have resulted in higher planted sugarcane fields and in 2022/2023, a better crop is expected, resulting in higher yields, more sugar, lower unit costs and improved sustainability. Short and medium term strategies include increasing land under cane, and improved and more efficient factories.Eswatini is working on growing its sugar market share into COMESA particularly Kenya, and continue to sell sugar (including brown sugar) into Southern Europe. If prices improve, Eswatini will be sufficiently competitive to sell into world markets.
The Sugar Industry Eswatini
2022
Full Report
R 1 900.00(ZAR) estimated $103.78 (USD)*
Industry Landscape
R 1 330.00(ZAR) estimated $ 72.65 (USD)*
Historical Reports
The Sugar Industry Eswatini 2019-10-14
R 1 900.00(ZAR) estimated $103.78 (USD)*
View Report Add to CartTable of Contents
[ Close ]| PAGE | ||
|---|---|---|
| 1. | INTRODUCTION | 1 |
| 2. | COUNTRY PROFILE | 1 |
| 3. | DESCRIPTION OF THE INDUSTRY | 3 |
| 3.1. | Industry Value Chain | 6 |
| 3.2. | Geographic Position | 7 |
| 3.3. | Size of the Industry | 9 |
| 3.4. | Key Success Factors and Pain Points | 10 |
| 4. | LOCAL | 11 |
| 4.1. | Key Trends | 14 |
| 4.2. | Notable Players | 16 |
| 4.3. | Trade | 18 |
| 4.4. Corporate Actions | 21 | |
| 4.5. Regulations | 21 | |
| 4.6. Enterprise Development and Social Economic Development | 22 | |
| 5. | AFRICA | 24 |
| 6. | INTERNATIONAL | 27 |
| 7. | INFLUENCING FACTORS | 31 |
| 7.1. | Environmental Issues | 31 |
| 7.2. | Input Costs | 33 |
| 7.3. | Renewable Energy | 33 |
| 7.4. | COVID-19 | 34 |
| 7.5. | Economic Environment | 34 |
| 7.6. | Labour | 35 |
| 7.7. | Technology, Research and Development (R&D) and Innovation | 37 |
| 7.8. | Disease and Pests | 37 |
| 7.9. | Political Risks | 38 |
| 7.10. | Forced Evictions | 38 |
| 7.11. | Poverty | 38 |
| 7.12. | 7.12. HIV/AIDS | 39 |
| 7.13. | Cyclicality | 39 |
| 7.14. | Infrastructure | 39 |
| 7.15. | Food Safety | 40 |
| 7.16. | Government Support | 40 |
| 8. | COMPETITIVE ENVIRONMENT | 41 |
| 8.1. | Competition | 41 |
| 8.2. | Barriers to Entry | 41 |
| 9. | SWOT ANALYSIS | 42 |
| 10. | OUTLOOK | 43 |
| 11. | INDUSTRY ASSOCIATIONS | 43 |
| 12. | REFERENCES | 44 |
| 12.1. | Publications | 44 |
| 12.2. | Websites | 44 |
| APPENDIX 1 | 46 | |
| Summary of Notable Players | 46 | |
| COMPANY PROFILES | 47 | |
| Crookes Plantations Ltd | 47 | |
| Royal Eswatini Sugar Corporation Ltd (The) | 49 | |
| Tambankulu Estates Ltd | 52 | |
| Ubombo Sugar Ltd | 54 | |
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