South Africa's Standard Bank expects sugar production in Africa to grow, supported by increased demand and firmer prices, its head of investment banking said.
Africa's top bank by assets said it was experiencing an increased appetite for investment in sugar production and processing.
“Globally there is a top-of-mind focus on mineral resources, oil and gas as the most attractive investment opportunities. But in agriculture and sectors such as sugar, Africa has innovative and attractive investment opportunities,” Helmut Engelbrecht, the head of investment banking for Africa, said in a statement.
Engelbrecht said the growing international and local consumer demand for the commodity continued to make the sugar industry a strong investment case.
“We expect a good pipeline of funding deals in regions such as East Africa and especially in countries like Kenya, where we are seeing opportunities beginning to pick up steam,” he said.
Also boosting growth prospects was the European Union's preferential pricing policy for emerging sugar producers, such as Swaziland and Mozambique, said Engelbrecht.
The EU unveiled a new trade regime in 2009 that allowed the world's poorest countries quota and tariff-free access into the market.
ICE front-month sugar futures stood at 28.96 cents a lb, up 0.80 percent as of 0850 GMT.
Standard Bank has in the past financed expansion projects for companies such as South Africa's Illovo Sugar and Nigeria's Golden Sugar Company. - Reuters