SA Canegrowers have raised concern about data from the local sugar industry that shows a 20% collapse in local sugar sales, when compared over the same period of time in the previous three seasons.
Current season sales dropped from 626 417 tons in 2023/24 to 433 380 tons this season.
SA Canegrowers said that under the Sugarcane Value Chain Master Plan, an agreement initiated by the South African government, retailers and manufacturers have committed to sourcing 95% of their sugar from South Africa.
“The Master Plan is a formal compact between local industry, end users, labour, and government, brokered by the Department of Trade, Industry and Competition. Its aim is to protect South African jobs, ensure equitable access to the local sugar industry, and secure South African production capacity,” the association said.
SA Canegrowers added that it has over the past years raised the alarming displacement of locally grown sugar with heavily subsidised imported sugar, especially at retailers.
Higgins Mdluli, chairman of SA Canegrowers said that when retailers signed the Master Plan, they didn’t commit to only avoiding deep-sea imports from countries such as India, Brazil and Thailand.
“They committed to supporting South African sugar, South African jobs and South African transformation. You cannot honour that commitment by sourcing sugar from outside the borders of our country and simply arguing it doesn’t count as an import because it comes from a neighbouring country with no import tariff. The local communities who depend on this industry don’t experience the difference, the money still leaves South Africa, and local livelihoods still suffer.”
SA Canegrowers said that sugar produced in countries like eSwatini can enter South Africa without incurring an import tariff, as the countries are part of the Southern African Customs Union, a free-trade area.
“However, by stocking and selling sugar from this country, retailers are supporting jobs in neighbouring countries, whilst local growers in Mpumalanga and KwaZulu-Natal face losing income due to reduced sales," he said.
SA Canegrowers added that cross-border sugar sales also don’t contribute to local transformation efforts, rural development, customer rebates and do not participate in efforts to increase import tariffs and reduce the sugar tax, yet they receive all the benefits.
“By buying sugar from eSwatini, one is directly undermining efforts to ensure the sustainability of the South African sugar growing and milling industry.”
Dawie Maree, head of FNB Agriculture Marketing and Information said that there was a reduction in the amount of local sugar sold at retailers, and an increasing number of imported products on the shelves.
“This is definitely not to the benefit of the local economy and more importantly, the rural economy in KwaZulu-Natal and Mpumalanga. Producers need to compete with either subsidized imports or imports that enter the market free of tariffs, as is the case of eSwatini, which is a SACU member. “
In August International Trade Administration Commission of South Africa (ITAC) increased the Dollar Based Reference Price (DBRP) for sugar imports from $680 (R10 964) to $785 (R12 660) per tonne.
ITAC said that 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.
yogashen.pillay@nationalmg.co.za