SADC sugar producers worried about Brexit

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SADC sugar producers worried about Brexit

6:58 CAT | 13 Sep 2017

Reuters (File photo)

Sugar producing countries in SADC (Southern African Development Community) are concerned that the threatened withdrawal of the United Kingdom from the European Union in 2019 will deal a severe blow to SADC sugar exports.

At a meeting in Maputo on Tuesday and Wednesday to discuss the implications of the UK’s likely withdrawal from the EU (“Brexit”), the Federation of SADC Sugar Producers (FSSP) considered that the Southern African regional market would be an alternative for absorbing the sugar that once went to the UK.

The EU is both the third largest producer of sugar and the second largest consumer of sugar in the world. The EU accounts for 30 per cent of SADC sugar exports, and within the EU, the largest buyer of SADC sugar is the UK. Mozambican sugar producers are particularly dependent on the European market.

It is feared that, once it is outside the EU, the UK will stop buying SADC sugar, opting instead for sugar from other European countries, or from countries such as Brazil or India.

Addressing the meeting, the Mozambican Deputy Minister of Industry and Trade, Ragendra de Sousa, said both Mozambique and SADC should reflect on the need to diversify the markets for their sugar. “The world does not end in the European Union and there are other partners”, he said.

The five sugar plantations and mills currently operational in Mozambique are major employers. Between them, they provide jobs for over 35,000 workers (including permanent and seasonal jobs). The number of Mozambicans dependent on the sugar industry is estimated at 150,000, and sugar exports earn about 90 million dollars a year.

The chairperson of the Association of Mozambican Sugar Producers (APAMO), Rosario Cumbe, said “We have to look at ourselves as SADC, and begin to think about creating the regional market”.

In some countries, including Mozambique, the market is saturated. Mozambique has the installed capacity to produce 550,000 tonnes of sugar a year, but currently only produces 460,000 tonnes. About 220,000 tonnes is consumed domestically, and the rest is exported.

But several other SADC countries do not produce enough sugar for their own needs. They include Angola, Tanzania and the Democratic Republic of Congo. As a whole, according to Cumbe, the SADC market has a deficit of two million tonnes of sugar.

Source: AIM