Pricing Agribusiness Risk

Our expertise and experience in pricing risk in agribusiness enterprises is central to our ability to advise on capital markets funding strategies.

Sugar

Our sugar focus is geographically specific to Sub-Saharan Africa. Sugar is an important crop for Sub-Saharan Africa where a focus on local consumption provides an opportunity for profitability and capital growth. The listings associated with the production & processing of sugar typically represent some 30% of agri-sector capitalisations for Sub-Saharan agricultural businesses. South African & Mauritius listed companies dominate the sector; each country has sugar interests with market capitalizations exceeding $1bn, followed by Zambia and Zimbabwe with listings worth over $328m and $212m respectively. The South African sugar industry is of real importance to national economies and it makes an important contribution to employment [79,000 direct jobs + as many as 350,000 indirect jobs]. Approximately one million people, more than 2% of South Africa’s population, may depend on the sugar industry for a living. The industry produces an estimated average of 2.2 million tons of sugar per season. About 60% of this sugar is marketed in the Southern African Customs Union (SACU). The remainder is exported to markets in Africa, Asia and the Middle East – but crucially not to the EU. Sugar is a critical sub-sector of agriculture in SSA, it plays an important role in economies across the region, largely as a dietary component, but there is growing interest in the crop for the production of ethanol. While Africa is frequently portrayed as being a low cost agri-producer, the low level of mechanization, high labour content and low productivity, would suggest that the reality is otherwise.