South Africa sugar output, exports drop last season

South African sugar production in the 2008/2009 sugar season fell 13 000 t to 2,6-million tons, while 19,3-million tons of sugarcane was crushed during the season, which was 40 000 t down on the year before, South African Sugar Association (Sasa) chairperson Martin Mohale said at a Sasa-hosted event in KwaZulu-Natal this week, marking the opening of the sugar season.

He noted that raw sugar exports for the past season amounted to 821 657 t, earning R2,5-billion in foreign exchange. For the 2007/2008 season, however, 873 842 t were exported, earning R1,6-billion.

“Over the past year, the sugar price was volatile,” Mohale explained.

“The general trend in the price was however upwards. The global commodities bubble did temporarily impact negatively on this trend. Since then though, production declines in India, reduced production in the EU, and the impact of the credit crisis on planned expansion on the Brazilian sugar sector, has impact positively on the global sugar prices.”

He said unprecedented price increases in a number of major production inputs over the past two years had been deeply felt in the 2008/2009 production season.

“The affordability of these inputs impacted significantly on farming practices, resulting in reduced cane yields,” he said.

Mohale added that a recent survey had recorded a significant drop of more than 4 000 or 10% in the number of small-scale sugarcane farmers producing sugarcane on tribal land.

“The effect of the credit crisis will still be felt in the sugar sector over coming years. It is not only affecting the availability of production loans for farmers, but is also impacting on the availability of credit to fund capital replacement and expansion and cane replanting projects.”

“Despite its recognised status as one of the world’s lowest cost and most efficient sugar producers, the South African sugar industry continues to experience declining financial returns,” Mohale concluded.

source: engineeringnews