Sugar production and exports trend analyses, the basis for informed competitive trade policies: The case of South Africa within the tripartite free trade area

This article investigates the trends in South Africa`s sugar production and exports and determines the drift rate within the Tripartite Free Trade Area (TFTA) between 1996 and 2024. Trend analysis is crucial for informing policy to ensure that the competitiveness of the sugarcane industry is enhanced. To achieve this objective, it was, therefore, hypothesized that there were no trends in South Africa’s sugar production and exports within the TFTA member states, there was no drift rate variation in South Africa’s sugar exports within the TFTA member states and there was a significant positive correlation between South Africa’s sugar production and exports between 1996 and 2024. Secondary data used in this study were obtained from the Economic Analysis and Agricultural Statistics Directorate of the Department of Agriculture, Land Reform and Rural Development (DALRRD) as well as the TradeMap database. Using time series data, the trend analysis results revealed that there were regular fluctuations in sugar production in South Africa during the period under review. Similar fluctuations were concurrently noted for the raw and refined sugar exports. It is important to note that factors of a seasonal nature generally explain such fluctuations, hence, it was concluded that seasonal variations accounted for these fluctuations in the sugar industry. The Johansen test model was employed to determine the drift rate and the results revealed a drift rate variation of 32% for raw sugar and 56% for refined sugar indicating potential for growth in South Africa’s sugar exports. The Pearson correlation test results revealed that there was a positive correlation between sugar production and export in South Africa at the time. Further analysis using bivariate correlation analysis between sugar production and exports confirmed the results, clearly indicating a positive relationship. Improving productivity through appropriate government interventions can be expected to have a positive impact on sugar exports and South Africa’s balance of payments. Key words: drift rate, exports, Johansen test, production, South Africa, sugarcane, trend analysis