Mozambique needs higher sugar output: minister

MAPUTO (Reuters) - Mozambique urgently needs to increase its sugar output in order to meet rising global demand, a government minister said on Monday.

Trade and Industry minister Antonio Fernando told Reuters in an interview demand for Mozambican sugar was increasing and several countries, such as Egypt, Indonesia and the Seychelles had formally shown interest in buying the product.

"We need more sugar not only to export to the SADC region, within the Free Trade Area, but also to the whole world. Mozambique is receiving ever more proposals to buy sugar, because demand is greater," Fernando said.

Mozambique's sugar production is expected to rise to 295,000 tonnes in 2008, up 21 percent from 243,000 in 2007, due to favourable weather and higher investment.

Sugar produced in Mozambique is now sold locally and exported to the European Union (EU), as part of the ACP/EU 'Everything But Arms' Initiative.

Fernando said sugar production in Mozambique was likely to reach 500,000 tonnes in 2009 from four operational firms in Xinavane and Maragra in Maputo province, and Mafambisse and Marromeu in central Sofala province offering 20,000 jobs.

In 1972, Mozambique was the world's fourth largest sugar exporter after Mauritius, South Africa and Egypt, but 16 years of devastating civil war wrecked the entire infrastructure, drastically cutting production.

Officials say the country's sugar sector is undergoing a revival, and more than $500 million has been invested in the industry, much of it by South African firms.

The Mozambique government is known to be encouraging foreign funding from British and Mauritian firms.