2017 has been a “mixed bag” for the industry. From a positive perspective, a return to a semblance of normal production has been most welcome following the recent drought, the worst in two decades. However, from a government policy perspective the industry faces uncertainty on the implementation of the sugar sweetened beverage tax or the health promotion levy as it is now called. The levy will have a significant negative impact on demand for sugar in the domestic market. In addition, the industry from July 2017 has been granted an effectively reduced level of tariff protection from that which was granted in 2014, which in itself was inadequate. This follows the recent review by the International Trade Administration Commission (ITAC) of the tariff formulate for maize, wheat and sugar. Imports of sugar from Brazil into South Africa are at record and unsustainable levels. With the rand having strengthened and the world sugar price having fallen, the industry faces significant competition from imports in its domestic market, despite it being an internationally cost competitive industry.
The millers will continue in 2018 to work with government in the interests of transformation, job preservation, economic growth and on health issues. The industry remains extremely vulnerable to the policy environment with negative consequences, in particular, for the rural economies of both KwaZulu-Natal and Mpumalanga, if the health promotion levy is implemented and if the industry is not protected by an effective tariff.
Millers will also continue to work with its partners, the growers, in promoting a viable and sustainable industry. For the sake of sustainability, the industry requires policy certainty and a supportive investment environment. SASMA is hopeful that 2018 will be a turnaround year for the industry and its stakeholders.