As the 2016 season closes a new season for 2017 beckons. Sugar production in 2016 was the lowest on record since 1993/94. This followed on the drought of the 2015 year which produced the second lowest crop since 1993/94. While good, but patchy rains, have fallen ahead of the 2017 season, the poor level of dams in irrigated mill areas and the legacy of the drought in dryland areas will result in a below average sugar crop in 2017.
It will be an anxious wait for the industry in 2017 as government considers policy measures which could impact on the industry. These are, in particular, the dollar-based reference price and the sugar sweetened beverages (SSBs) tax. In July 2016, government announced a review of the dollar-based reference price and the variable tariff for sugar together with that of maize and wheat. The industry is of the view that the dollar-based reference price is set at an unsustainably low level but that the variable tariff formula is an appropriate mechanism. On the matter of the SSBs tax, the industry is supportive of a holistic approach to combating obesity but does not believe that a tax on SSBs will be a panacea for a complex problem. However, the tax will be damaging to the industries and communities who grow and manufacture sugar and SSBs.
The industry and millers will continue in 2017 to work with government in several areas in the interests of transformation, job preservation and economic growth. This includes in the areas of health, agricultural extension and land reform.
Millers will also continue to work with its partners, the canegrowers in promoting a viable and sustainable industry which can continue to contribute to rural economies. The drought impacts not only the agricultural sector but the millers are likewise affected. The millers will play their role in supporting growers impacted by drought to ensure that production returns to normal as soon as possible.
The industry faces many challenges but with more favourable international sugar prices currently on offer, the sooner that the industry can overcome the legacy of the drought, the sooner the industry, its stakeholders and the economy will benefit. Increased production can only be achieved by working collectively with government and with all stakeholders. The industry requires policy certainty and a supportive investment environment. SASMA is hopeful that 2017 will be a positive year for the industry and its stakeholders.