International Trade Administration Commission of South Africa (ITAC) increased the Dollar Based Reference Price (DBRP) for sugar imports from $680 (R(R10 964) to $785 (R 12 660) per tonne.
The sugar industry welcomed the decision, but the South African Sugar Association (SASA) and SA Canegrowers said the revised benchmark may still not provide sufficient protection against subsidised sugar imports.
ITAC said its review found that the DBRP formula remained an appropriate and necessary mechanism for administering the sugar tariff regime because it provides transparency, predictability and administrative consistency.
“However, having considered the submissions from both SASA and Beverage Association of South Africa (BEVSA) ,the Commission concluded that neither party’s proposed DBRP would appropriately balance the need to provide adequate and proportionate support to the domestic sugar industry,” ITAC said.
ITAC said it recognised the importance of the domestic sugar industry to employment, rural economic activity and livelihoods.
“The Commission decided that the Dollar Based Reference Price for sugar be increased from the current US$680 per tonne to US$785 per tonne, based on the six year weighted average London No. 5 FOB sugar settlement price of US$559 per tonne,” ITAC said.
SASA welcomed the upward adjustment of the DBRP, saying the development came as the industry faced a sugar import crisis.
SASA vice chairperson Trix Trikam said the increase would not sufficiently protect the local industry against imports from subsidised countries such as Brazil.
“In our application, which we lodged with ITAC in October 2024, we requested that the DBRP be increased from $680 to $905 per tonne,” Trikam said.
“Based on our calculations and analysis, the envisaged level of $905 would have afforded us adequate protection against devastating sugar imports. Therefore, the gazetted DBRP of $785 per tonne falls short of what constitutes an adequately calibrated tariff.”
SASA said it would continue engaging with the government to explore additional mechanisms to support the industry’s sustainability.
The association said the industry was central to rural economies in KwaZulu Natal and Mpumalanga. It said the sugarcane growing and milling sectors supported the livelihoods of at least one million people in the two provinces, while the industry created 65 000 direct jobs and 270 000 indirect jobs.
SA Canegrowers said the adjustment was welcome, but might not go far enough to close the gap that had allowed subsidised imports to displace locally produced sugar in the domestic market.
SA Canegrowers chairperson Higgins Mdluli said the adjustment showed that the government understood the severity of the crisis facing sugarcane growers.
The association said the DBRP is the benchmark price, set in US dollars, that underpins South Africa’s variable tariff on imported sugar. The reference price had been set at $680 per tonne since 2018.
When world sugar prices fall below the reference price, a tariff is applied to make up the difference. SA Canegrowers said this was intended to prevent imports from undercutting local producers and flooding the domestic market.
SA Canegrowers said the lower DBRP had left South Africa exposed to a surge in sugar imports over the past two years.
“Duty paid imports for the January to June period rose from just 1 619 tonnes in 2022 to 124 594 tonnes over the same period in 2026, a more than 70-fold increase in four years,” the association said.
“Over the same period, local sugar sales have fallen by 35%, or about 188 000 tonnes. This has happened in just three seasons.”
“Grower proceeds have fallen by R1.33 billion, largely due to the export burden. The proportion of saleable sugar the industry is forced to sell offshore at a loss, rather than into the domestic market, has risen from 22% to 37%,” added the association.
Mdluli said growers would watch closely in the coming months to determine whether the adjustment resulted in a meaningful reduction in sugar imports.
“We are encouraged that the government has acted, but we will be watching closely over the coming months to see whether this adjustment translates into a genuine reduction in the volume of imported sugar entering the country,” he said.
“Growers need certainty, not another partial fix. We remain ready to work with government and all stakeholders to ensure the sugar industry can compete on a fair footing,” concluded Mdluli.
yogashen.pillay@nationalmg.co.za