FAQs

Eswatini Sugar is a body created by – and made up of – independent sugarcane growers and millers in Eswatini, with the primary responsibility of regulating the industry and marketing all its sugar and by-products (currently molasses).

The sugarcane growers and sugarcane millers are owned independently and perform their respective functions of growing sugarcane and producing sugar. Once the sugar is produced, it is immediately transferred to the Eswatini Sugar warehouses for storage and marketing purposes.

Eswatini Sugar is a non-profit making entity. All proceeds from the sale of sugar and its by-products are distributed back to the members based on a sharing formula agreed between them. Eswatini Sugar only retains funds necessary to cover its costs of regulation and marketing.

The industry currently produces four types of sugar:

a) Raw Sugar: This is sugar that is produced in bulk form (not bagged)  for further processing in foreign markets to produce refined sugar mainly. Because it fetches low value for the industry, the sugar is produced on residual basis i.e. when it is either not possible to produce the high-quality direct consumption sugar or there is not enough bagging capacity. This sugar is normally sold to Europe or the US.

b) Brown Sugar: This is very high polarization (VHP) brown sugar that is produced for direct consumption and is usually supplied by Eswatini Sugar in bags (1.075 t, 1 ton or 50kg bags or 25kg). This is sold to SACU (including the local market), regional and EU markets mainly.

c) Refined Sugar: This is white sugar produced by the two refineries (Mhlume and Ubombo) and is supplied to customers in bulk bags of 1 ton or 50kg bags. It is mainly available for sale to the SACU market (given the limited volume currently produced).

d) Specialty Sugar: The industry produces limited volumes of Demerara and Nucane (Low GI brown sugar). These sugars are targeted for sale to the EU and/or SACU markets, respectively.

The industry produces about 700 000 tons of sugar per year, 70% of the sugar is committed on long term contracts.

All sugar produced by the mills is marketed centrally by Eswatini Sugar, per the agreement between sugarcane growers and millers. There is therefore no need to approach the mills for sugar. The Eswatini Sugar Commercial Department, headed by the Commercial Director, is responsible for the marketing of sugar within the industry.

All companies are eligible to apply for a sugar allocation. Eswatini Sugar then uses a pre-defined selection criteria to determine whether an entity qualifies for an allocation depending on the target market, applicant profile, intended use for the sugar (or profile of end user) and other considerations.

There are varying prospects for an allocation as there are various issues considered. The following are some examples:

• Buying Sugar for Local Use: There is already a saturation of customers in the pre-packing segment and Eswatini Sugar is currently not allocating sugar for purposes of pre-packing. Applicants who want to use sugar for higher value-added processes are however strongly considered. These are usually those who want to produce finished sugar-containing products. Those who require pre-packed sugar locally are referred to the local packers.

• Buying Sugar to Supply an Entity in SACU (outside Eswatini): Eswatini Sugar encourages value addition of sugar within Eswatini. However, the Eswatini market is limited in size and there is therefore opportunity to supply other countries in SACU. In such instances, Eswatini Sugar does not deal with middlemen or traders or brokers but deals directly with the entity that requires the sugar for own use (again it prioritises those requiring the sugar for manufacturing – rather than pre-packing – purposes).

• Buying Sugar for Export to Countries in Rest of Africa: Eswatini Sugar allows local entities to apply for sugar to be sold to the rest of Africa, even as traders. The entity must, however, demonstrate capability and experience in such cross-border trade (even if it is outside the sugar sector).

• Sugar for Sale to Destinations Outside Africa: These enquiries are dealt with and supplied directly by Eswatini Sugar, not through local traders. International commodity trading firms or direct sugar users are usually approached, through a Call for Proposals, to market the sugar on behalf of Eswatini Sugar to these further away destinations, given their local knowledge and international logistics expertise.

Potential customers are required to apply for a sugar allocation from Eswatini Sugar. This is done by writing a proposal on volumes, the intended use for the sugar and the markets that they want to supply. The proposal must be accompanied by a company profile of the entity that is applying for the allocation.

Depending on the application and the contents thereof, an acknowledgement is provided, and clarifications may be sought. Should the application warrant further consideration, a response is usually issued within a month after the application is received. This is informed by factors such as availability of sugar, the nature of the entity applying, intended use for the sugar, convening of necessary committee to consider application, to name a few.

Eswatini Sugar does not have an application form but the application/proposal (in the form of a letter or email) must contain the following, as a minimum:

• Description of entity applying.

• Brief profile of entity, including experience in sugar/commodity trading if any.

• Operating premises.

• Intended use of the sugar.

• Product required (sugar type).

• Required quantity (per month and per year).

• Market where the sugar is intended

• Pre-packing: defined as the packaging of sugar in smaller packs of less than 25kg.

• Industrial: defined as the use of sugar for the production of intermediate (not final)

products.

• Manufacturing: defined as the use of sugar for the production of a final consumable

product.

It is not likely for the allocation to be considered favourably, given the saturation of the market and low-value addition nature of the operation.

Given that this is a higher value add process than pre-packing, such applications would normally receive more favourable consideration than pre-packing. The only challenge is that this operation is usually tied with pre-packing and thus not usually viable on its own. Thus, such applications are not being entertained at this stage. Again, applicants are encouraged to submit applications detailing their requirements, including the niche market they wish to serve and how their venture can be viable without attaching a pre-packing element to it.

This is most encouraged, and Eswatini Sugar reserves a volume annually for enterprises who want to venture into production of manufactured sugar-containing finished products. Applicants must submit an application containing details on intended use for the sugar and demonstrate the availability of a market for the final product.

Eswatini Sugar sells its sugar normally on an ex-works basis to all its Eswatini-based customers. Eswatini Sugar ordinarily does not deliver sugar and customers have to make their own transport and delivery arrangements. Where necessary, for destinations outside Eswatini, Eswatini Sugar may assist customers with referral to reputable transporters who they can contract to handle the logistics for the movement of the sugar.

Eswatini Sugar does not pay any remuneration (commission, facilitation fee, referral fee, etc) to any individual or entity that may choose to introduce a customer to Eswatini Sugar. The patriotism of all emaSwati in supporting the buying of Eswatini sugar is nonetheless welcome.