Who Owns Whom

sugar industry eswatini

The Sugar Industry Eswatini 2022

Charles Chinya | Eswatini (formerly Swaziland) | 28 February 2022

The Sugar Industry Eswatini 2019

Natalie Bryden | Eswatini (formerly Swaziland) | 14 October 2019

Enquire about this report

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. \r\n\r\nGood 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.\r\n\r\nEswatini 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.

Read More..
The Sugar Industry Eswatini
The Sugar Industry Eswatini 2022

Full Report

R 6 500.00(ZAR) estimated $371.76 (USD)*

Industry Landscape

R 4 550.00(ZAR) estimated $ 260.23 (USD)*

Historical Reports

The Sugar Industry Eswatini 2019-10-14

R 1 900.00(ZAR) estimated $108.67 (USD)*

View Report Add to Cart

Table 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
0

Introduction

This report focuses on the manufacture of sugar in Eswatini (formerly Swaziland), which is a major sugar producer on the continent. Sugar, known in Eswatini as “Swazi Gold”, is the country’s main export commodity, and Eswatini is the 4th largest sugar producer in Africa and the 25th largest producer in the world. Sugar production accounts for over half of Eswatini‘s agricultural output and contributes about US$285m to the country’s gross domestic product (GDP). As part of the agricultural as well as the manufacturing sector, it accounts for 18% of the country’s GDP. The industry employs more than 20,000 workers.

Strengths

• Access to preferential markets.
• Eswatini is a globally competitive producer of high-quality sugar.
• High productivity in cane growing.
• Support from the government.
• Technical efficiency in sugar production.
• The sugar industry is a significant contributor to economic growth and development.

Weaknesses

• Deficiencies and inefficiency of public utilities, with their related high costs.
• Increasing costs of sugar production.
• Increasing inefficiency of smallholder farmers in growing sugar.
• Inefficient infrastructure and high transport costs.
• Negative export conditions due to high tariffs and lack of subsidies.
• Reliance on favourable weather conditions.
• Skills shortages.
• The decline in the area under cane farmed by small growers.
• The global sugar price is affected by subsidy-induced overproduction in some major sugar-producing countries.

Opportunities

• Diversification into other sugar-based products.
• Nurturing regional demand.
• Supply of sugar markets previously supplied by Brazil and least developed countries.
• The generation of renewable electricity.
• The production of bioethanol.

Threats

• Competition from the alternative sweeteners market.
• Expropriation of land and possible decrease in sugar cane production.
• Failure of smallholders to run farms efficiently.
• Global oversupply of sugar and lower sugar prices.
• Low returns to smallholders, and reduced viability of irrigation projects.
• Price pressures in the customs union.
• Removal of restrictions for domestic sugar beet production in the EU.
• The introduction of the sugar tax in many countries.

Outlook

Global overproduction of sugar and a fall in the price obtainable for Eswatini sugar in export markets, including the Southern African Customs Union, pose the biggest threats to the country’s sugar industry. The industry has witnessed a decline in exports to some of its most lucrative markets, and this trend may continue as more countries impose sugar taxes due to health concerns. Low returns may force some smallholder sugar farmers to diversify their crops. In the longer term, climate change and unpredictable weather patterns will be of major concern to the industry.

The Sugar Industry Eswatini
The Sugar Industry Eswatini 2019

Full Report

R 1 900.00(ZAR) estimated $108.67 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 76.07 (USD)*

Historical Reports

The Sugar Industry Eswatini 2022-02-28

R 6 500.00(ZAR) estimated $371.76 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. COUNTRY INFORMATION 1
3. DESCRIPTION OF THE INDUSTRY 2
3.1. Industry Value Chain 4
3.2. Geographic Position 5
4. SIZE OF THE INDUSTRY 6
5. STATE OF THE INDUSTRY 7
5.1. Local 7
5.1.1. Corporate Actions 13
5.1.2. Regulations 13
5.1.3. Enterprise Development and Social Economic Development 14
5.2. Continental 15
5.3. International 16
6. INFLUENCING FACTORS 18
6.1. Finance 18
6.2. Cost 18
6.3. Global Pricing Pressure 18
6.4. Climate Change and Drought 19
6.5. Cyclicality 20
6.6. Infrastructure 20
6.7. Diseases and Pests 20
6.8. Renewable Energy 20
6.9. Corruption and Forced Evictions 22
6.10. Poverty 23
6.11. Government Initiatives 23
6.12. IFAD Projects 24
6.13. Health Concerns 24
6.14. Food Safety 25
6.15. HIV/AIDS 25
6.16. Technology, Research and Development (R&D) and Innovation 26
6.17. Political Risks 26
6.18. Labour 27
7. COMPETITION 28
7.1. Barriers to Entry 28
8. SWOT ANALYSIS 28
9. OUTLOOK 29
10. INDUSTRY ASSOCIATIONS 30
11. REFERENCES 30
11.1. Publications 30
11.2. Websites 31
APPENDIX 1 33
Summary of Notable Players 33
COMPANY PROFILES 34
CROOKES PLANTATIONS LTD 34
ROYAL SWAZILAND SUGAR CORPORATION LTD 36
TAMBANKULU ESTATES LTD 40
UBOMBO SUGAR LTD 42