Though the European Union (EU) has been a lucrative market for Swazi sugar, the price received by the local industry has dropped by about 50 percent in a space of two years.
Swaziland Cane Growers Association (SCGA) Chief Executive Officer Sipho Nkambule said up to now Swazi cane growers have not felt the full impact of the price decline.
He said the cushion has been provided by factors such as exchange rate and alternative markets.
Nkambule said historically, the EU has been the primary and lucrative market for Swazi sugar and the preferential process were good.
“However, today it is estimated that the EU price, received by the Swaziland industry has dropped by nearly 50 percent in a space of about two years. Up to now Swazi cane growers have not felt the full impact of the price decline. The cushion has been provided by factors such as exchange rate and alternative markets. Large quantities of our sugar were diverted to the Southern African Customs Union (SACU) market which pays a premium price by todays’ standards. As a result the decline in the price received by growers started declining in 2014/15 by about 10 percent. Unfortunately it does seem like this trend might continue for a while longer,” he said at the smallholder sugar cane growers’ competition held at Sihhoye.
He said the African continent had a net deficit of sugar and Swaziland because of its geographical location had a competitive advantage.
However, the CEO said tariff and non-tariff barriers remained a challenge.
He said they looked up to government, working closely with the industry to negotiate favourable trading terms with the continent by leveraging membership of organisations like the Southern African Development Community (SADC), Common Market for Eastern and Southern Africa (COMESA) and Tripartite Free Trade Area (TFTA).
Nkambule said the industry had to step up its marketing strategy and capacity so as to attract alternative buyers/consumers.
He said the requisite changes would call for some legislative reforms.
The CEO said creating awareness in the country’s polity and making structures was paramount in ensuring that such reviews ensured equitable and beneficial participation by cane growers.
Nkambule said diversification of revenue sources for the local cane growers was another opportunity up for the taking.
He said the growers had to partner with other stakeholders to realise a fair value from the stick of cane through co-investments and meaningful participation in alternative cane revenue streams.
The CEO said these could be power generation, ethanol production and fertiliser substitutes such as stillage.
He said the success of co-investments by cane growers was contingent upon an enabling policy and legislative framework.
Source: www.observer.org.sz