Mbabane: Despite a wider trade account deficit, the country’s exports increased by 7.5% to E13.260 billion as at March 31, 2010. The Central Bank of Swaziland (CBS) annual report for the period April 2009 to March 31, 2010 states that 65% of these were destined for South Africa while 35% were to the rest of the world. The increase in exports was largely accounted for by an increase in sugar export earnings.
The report states that despite a 21.6% decline in preferential European Union (EU) sugar prices and the depressed global economy, sugar export earnings remained at high of E2.4 billion in 2009.
'The relatively high sugar exports revenue was mainly a result of competitive prices offered by the EU on Swazi sugar during the review period,' the report states.
It says the favourable EU sugar prices were in line with developments in the world market sugar price which increased from about E3 082 (US$428) per tonne in the first quarter to approximately E5 141 (US$714) per tonne in the fourth quarter of 2009. Further contributing to the increase in exports, the report states, were new markets that some major exporters of food products were able to secure in 2009.
Meanwhile, it is reported that export earnings for wood pulp, textiles, canned fruit and citrus, refrigerators, meat and meat products destined for the global market were adversely affected by the persistently strong lilangeni/rand exchange rate against the dollar and other major currencies during the year.
'The global economic downturn also adversely affected wood pulp and sugar export earnings in particular. Global prices for pulp maintained a downward trend in the first and second quarters and stabilised in the third quarter of 2009,' it is stated.
'World market demand for wood pulp and wood products was low during 2009 resulting in unfavourable market prices.'
Exacerbating the challenges in this sector, the CBS notes, were forest fires which resulted in companies recording huge losses making it difficult for some major companies to continue operating. On the other hand, the textile industry, which focuses on supplying the United States market under the Africa Growth Opportunity Act (AGOA), did not perform well in 2009 mainly due to low demand, the CBS reports. It says regional markets for textiles were also depressed as global producers placed their products in the market resulting in oversupply and a subsequent reduction in prices.
Export earnings from citrus fruits recorded a decline from E123 million in 2008 to E117 million in 2009 mainly due to the global economic meltdown. Also, the report notes that competition in the citrus industry was high during 2010 whilst appreciation of the lilangeni against major world currencies added pressure to citrus export earnings.