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Sugar sector sweetest in Southern Africa

Harare – Southern Africa remains the most efficient sugarcane producing and processing region on the continent, and has the potential to expand annual output with further improvements in infrastructure, water and energy, an industry analysis shows.

Among the biggest sugar producers in Africa are eSwatini, South Africa and Zimbabwe, notes the Sugar in Africa Focus Report by the Oxford Business Group (OBG), a global research and consultancy firm which publishes economic intelligence on the Middle East, Africa, Asia, and Latin America.

The report says half of African countries produce sugarcane, the largest of which are South Africa and Egypt; while eSwatini, Morocco, Uganda, Sudan and Kenya are also notable producers.

“The Southern African Development Community is the most efficient sugarcane producing region on the continent in terms of yields. The region is well advanced in terms of sugar production overall, but several challenges still hinder its full potential,” said International Sugar Organisation executive director Mr Jose Orive in the report.

“Although there is sugar production across the continent, the south of Africa is the shining star. North Africa, for its part, has some of the best sugar refineries in the world. In West Africa sugar is produced alongside cocoa and other crops.”

South African raw sugar output is projected to increase slightly from 2.1 million tonnes in 2020/21 season to 2.2 million tonnes in 2021/22. In eSwatini, output is expected to reach 700,000 tonnes in the 2021/22 season, up from 690,000 tonnes in the prior year due to increased efficiencies at mills and production of higher-quality crops. Zimbabwe’s output is forecast to surpass 415,000 tonnes in the 2021/22 season, up from 408,518 tonnes last season.

“Zimbabwe exported 98,608 tonnes of raw sugar and 16,303 tonnes of refined sugar in the 2019/20 season, up from 62,815 tonnes and 10,094 tonnes, respectively, in the previous season,” notes the OBG report.

Sugar output in Africa stood at 10.9 million tonnes in 2019, up from 10.8 million tonnes produced the previous year and 10.1 million tonnes in 2017.

Africa accounts for around six percent of global sugar output – half of which is concentrated in Common Market for East and Southern Africa member countries. Africa’s global market share is projected to expand to eight percent by 2029.

Mr Orive said there was massive investment potential in the African sugar sector, pointing out opportunities presented by the African Continental Free Trade Area (AfCFTA).

“Investment opportunities are largely contingent on infrastructure development. There is room for investment in African sugar production, but sometimes countries have not been able to reach their full potential due to internal hurdles. It is not enough to just produce sugar; producers must be able to move it to buyers efficiently. There is great opportunity when it comes to investing in countries that have untapped potential, such as Mozambique, where there is very good land and a strong culture of sugar production,” he said.

“We are also lobbying for the swift implementation of the AfCFTA deal, and are encouraging the development of infrastructure and a legal framework so output from surplus countries can be exported to net importers more easily.”According to early estimates by Mr Orive’s organisation, global sugar production was estimated to have dropped from 171.2 million tonnes in 2019/20 to 169 million tonnes in 2020/21, largely due to the COVID-19 pandemic.

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