SUGAR INDUSTRY PLEADS WITH GOVERNMENT TO STOP SUGAR IMPORTS CRISIS

Cedric Mboyisa

The sugar industry is reeling from the upsurge in sugar imports, which is nearing the one-billion-rand revenue loss point – in just over six months of this season (2025/2026)!

“This sustained erosion of market share is crippling local millers and growers, placing an estimated 65 000 direct jobs—and thousands more dependent livelihoods—at risk,” said Sifiso Mhlaba, Executive Director of the South African Sugar Association (SASA). He added: “Without urgent intervention to restore adequate protection and reinforce local market demand, the continued influx of imports could inflict irreversible damage on one of South Africa’s most strategic and labour-intensive agro-industries based in the job-starved rural areas of KwaZulu-Natal and Mpumalanga.”

SASA, on behalf of the industry, lodged an application, in October last year (2024), with the International Trade Administration Council (ITAC) to increase the Dollar Based Reference Price (DBRP) to $905 (per ton) from the current $680 per ton. The reference price was last increased in 2018 when an avalanche of deep-sea sugar imports, mainly from Brazil, hit our shores, displacing local producers to the tune of at least two billion rand. The 2018 import crisis forced the industry to march to the offices of the then minister, Dr Rob Davies, as both farmers and millers cried out for government’s decisive intervention as sugar imports were wreaking havoc and driving them out of business. The current application for the tariff increase is primarily based on the cost of production, which has continued to significantly increase in the past seven years, during which period the DBRP remained unchanged.

“On the urgent tariff issue, it has already been over a year since we lodged our reference price increase application with ITAC. Should this exigent matter remain unresolved, it could spell disaster for the industry. The sooner the matter is resolved, the better for the sustainability of the industry. In our considered view, the most effective way to cushion us against the avalanche of imports is to increase the reference price to a sufficient level, which is in line with the current cost of production,” said Mhlaba.

The escalating import crisis poses a serious threat to its competitiveness and long-term sustainability. This sustained erosion of market share is crippling local millers and growers, placing an estimated 65 000 direct jobs—and at least one million livelihoods—at risk. Without the urgent intervention to restore adequate protection and reinforce local market demand, the continued influx of imports could bring the industry to its knees. The strategic protection (adequate tariff) of the industry has become even more important in the wake of the very worrying surge in imports in the first half of the current season.

“The key pillars for Phase 2 of the Sugarcane Value Chain Master Plan to 2030 are sustainable pricing, strategic trade protection, product diversification and small-scale grower support, and balanced food policy. If the situation (sugar imports crisis) is not arrested soon enough, our local producers could be displaced to the tune of more than two billion rand this season,” warned Mhlaba.

The industry and social partners have made progress with regards to finalisation of modalities around phase two of the master plan. In phase two, the industry will seek to intensify its efforts aimed at transitioning from a sugar-based to sugarcane-based industry, wherein multiple products are derived from the stalk of cane. “Our current direction/trajectory aligns with President Cyril Ramaphosa’s emphasis on diversification and decarbonisation regarding country’s the industrial policy and economic growth. This is our inflection point.”

Mhlaba concluded: “Our government is very crucial in putting in place enabling instruments to ensure the growth and sustainability of the industry. Without the support of government, we would be going nowhere slowly. Therefore, for diversification to become a reality, an enabling policy environment is crucial. This has been the case for all countries which have diversified successfully. Furthermore, we need an extension of the sugar tax moratorium to 2030 (in line with the master plan) to accord industry adequate time to investigate and pursue product diversification. We are optimistic that all social partners will find each other and progress to the implementation of phase two of the master plan. This will support the industry journey towards diversification, (further) transform and contribute to South Africa’s economic resilience.”

Cedric Mboyisa
is Group Communications & Media Manager at SASA