The sector is on track for a stronger harvest this season, with projections indicating a production of 17.7 million tons of sugarcane – a notable increase from last year’s 16.47 million tons, which marked the lowest yield in eight years.

The improvement follows a return to normal rainfall after a dry 2023, offering some welcome relief to sugarcane growers. However, despite this rebound in production, industry leaders are warning that unresolved trade issues could derail recovery and put thousands of livelihoods at risk.

“The delay in adjusting our own sugar import tariff to reflect current global realities is undermining the competitiveness of local producers,” says Higgins Mdluli, Chairperson of SA Canegrowers. “At the same time, the US tariff threatens our access to what has historically been one of our key premium export markets.”

South Africa is facing a surge in deep-sea sugar imports, much of which is heavily subsidised and lands at prices well below local production costs. While this sugar does not benefit consumers in terms of retail prices, importers are profiting by selling at local rates – undercutting domestic producers in the process.

This influx of cheap imports, combined with a stagnant local tariff that has not been adjusted in accordance with government provisions, is placing immense financial pressure on local growers. SA Canegrowers, which represents over 24,000 small-scale and 1,200 commercial growers, warns that the situation is unsustainable – especially in rural regions of KwaZulu-Natal and Mpumalanga where sugarcane farming underpins local economies.

“Unrestrained sugar imports displace local product from shelves or as input for commercial users, which lowers domestic sales. This forces us to export more sugar at a significant price disadvantage.”

The industry is also bracing for a potential 30% tariff on South African sugar exports to the United States – a development that could further limit market access and reduce global competitiveness.

The current crisis echoes the 2017/18 and 2018/19 seasons, when similar delays in updating the import duty left South African growers with large surpluses that had to be offloaded into a heavily distorted global market, resulting in major financial losses.

“History is at risk of repeating itself. Growers are already under pressure from the sugar tax and rising input costs. Unless urgent steps are taken, job losses in the sector will become inevitable.”

With production levels back to normal and demand in the Southern African Customs Union (SACU) fully met, the industry is capable of self-sufficiency. However, if the local market remains flooded by cheap foreign sugar, more South African sugar will have to be exported at a loss.

“We urge government to move swiftly: to revise the import duty in line with current global prices and to prioritise a new trade agreement with the US that safeguards our export potential.”

OFM Agri cg