Eswatini’s sugar industry is facing significant challenges as political instability in Mozambique disrupts crucial supply chains, forcing the Eswatini Sugar Association (ESA) to explore alternative export routes. According to ESA CEO Banele Nyamane, the unrest in Mozambique has led to increased costs and delays, particularly impacting the transportation of bagged sugar to regional markets. "What has been impacted is the bagged sugar destined for the regional markets," Nyamane explained. "Due to the long distance, we are now incurring around 10 percent more in costs."

Mozambique has long been an essential transit point for Eswatini’s sugar exports, especially to overseas markets such as the United States and the European Union. The Sociedade Terminal De Acucar De Maputo (STAM), located in the port of Maputo, is jointly owned by Eswatini, South Africa, Zimbabwe, and Mozambique. This terminal handle and distributes sugar from these countries to various global markets. However, with ongoing political unrest, including violent protests and a closure of key border points like the Lebombo border post between South Africa and Mozambique, there have been significant disruptions.

In a statement, Nyamane emphasized that despite the turmoil, bulk sugar shipments to the U.S. remain unaffected. "We sell bulk sugar to the USA, and our shipments are scheduled every August. So, for now, there is no impact on our U.S. sales," he said. The ESA exports approximately 26,535 tonnes of sugar to the USA annually under the African Growth and Opportunity Act (AGOA). Similarly, bulk orders to the European Union are scheduled for February and March, and Nyamane remains optimistic that the situation will stabilize by then.

However, the impact on regional markets has been more pronounced. The Southern African Customs Union (SACU), which includes Eswatini, South Africa, Botswana, Lesotho, and Namibia, has seen a rise in logistics costs, with transport infrastructure under strain. "The congestion at our borders and the rerouting of traffic have led to severe delays and increased costs," explained Bhekizwe Maziya, CEO of the National Agriculture Marketing Board. "We are also witnessing longer turnaround times as shipments are diverted to South Africa’s Durban port."

Despite these challenges, the ESA has seen positive financial results. In its 2023/24 annual report, the association reported a 13 percent increase in revenue, reaching E7.4 billion ($305 million), up from E6.44 billion the previous year. This growth was largely driven by higher world market sugar prices and favorable foreign exchange rates. However, the cost of sales also rose, from E6.1 billion to E7.04 billion, due to increased distribution expenses and higher freight rates.

The ESA remains focused on expanding its footprint in the region, particularly targeting Rwanda, the Democratic Republic of Congo (DRC), and Zimbabwe. However, competition is fierce, with many regional producers ramping up production. Furthermore, the African Continental Free Trade Area (AfCFTA) is expected to provide new opportunities for intra-Africa trade, but only if the geopolitical instability in Mozambique is resolved.

As Eswatini navigates these turbulent times, the sugar industry is facing both immediate and long-term challenges, from supply chain disruptions to higher operational costs. The outcome of the situation in Mozambique will be critical for the future of Eswatini’s sugar exports and its broader economic stability.