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A surge in sugar imports during the current 2025/26 sugar season is placing the local industry under severe pressure and could inflict irreversible damage to the industry.
During a recent media tour, the executive director of the South African Sugar Association (SASA), Sifiso Mhlaba, explained that the industry plays a vital role in rural communities in the ‘sugar belt’, where around a million people rely on it for their livelihoods. The industry provides approximately 65 000 direct jobs in these areas, where few other employment options are available, and an additional 270 000 indirect jobs.
South African sugar production centres around two main areas, namely KwaZulu-Natal and the Mpumalanga Lowveld, generating R24,3 billion in annual revenue. This is divided into R18,8 billion for KwaZulu-Natal and R5,5 billion for Mpumalanga.
There are currently 29 459 small-scale and 1 153 large-scale cane growers in the industry, supplying 16,5 million tonnes of cane to 12 sugar mills across the production areas.
Despite being a surplus sugar-producing country, Mhlaba says South Africa is facing an escalating import crisis that poses a serious threat to the industry’s competitiveness and long-term sustainability. These imports are mainly from Brazil, India, Guatamala, and Thailand.
It is concerning, said Mhlaba, that imports have skyrocketed, particularly over the last two years. Data shows that imports between April and December last year amounted to just under 164 000 tonnes, compared with 98 000 tonnes for the same period in 2024 – a figure that was already significantly larger than previous years.
Many of the countries exporting sugar to South Africa are heavily subsidised, and for every tonne of sugar that lands on South African shores, local producers lose R7 500. This means that imports to date this season have already cost local producers more than R1,2 billion. As a result, the sharp rise in imported sugar is pushing locally grown and refined sugar out of the retail market and food and beverage manufacturing, leaving local producers earning less for their product.
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 strategic and labour-intensive agro-industries, Mhlaba stressed.
Pratish Sharma is a large-scale cane producer who supplies cane to Tongaat Hulett’s Maidstone sugar mill. He employs 60 people in his business.
“The resulting price reduction on our locally produced sugar cane due to cheap imports reduces our ability to support the communities in our area. The communities living close to our farms depend on the income from the farms to survive, and the reduced income due to these imports severely impacts their quality of life.”
In addition, he pointed out, the sugar cane industry supports, and is intertwined with every other industry in these rural areas, forming a network of interdependent businesses. A loss of income for cane producers therefore has a severe effect on these industries, which may also be forced to scale down or even close. This leads to a loss of industrial capacity in the whole region, which in turn may lead to entire towns shutting down.
“Sugar imports,” he emphasised, “do not discriminate against any specific sector of the industry. Whether you are a small-scale of large-scale producer, the fact of the matter is that imports displace locally produced sugar in the export market. The international sugar market is a highly distorted one because of subsidised production in many countries. Sugar is then sold at prices far below production cost. By displacing locally produced sugar in the international market, which is essentially a dumping market, it reduces the revenue of the entire local industry.”
Import shield
The dollar-based reference price (DBRP) is a trade regulation mechanism used to protect the local sugar market from low-priced imports, according to Kulani Siweya, national market and trade policy executive at SASA. It sets a minimum price, currently at US$680/t, at which imported sugar is valued, triggering tariffs when the international price drops below this level.
SASA is of the view that the current DBRP of US$680 is insufficient, as it was set in 2018 based on cost of production and other factors at the time. Consequently, SASA has applied to the International Trade Administration Commission of South Africa (ITAC) in October 2024 for an increase in the DBRP to US$905. ITAC recently announced a self-initiated investigation due to two conflicting applications.
Tongaat Hulett uncertainty
The pending liquidation of Tongaat Hulett, a prominent role-player in the sugar sector, has further serious implications for the industry. The closure of Tongaat Hulett’s sugar mills, said Dr Thomas Funke, CEO of SA Canegrowers, would cause havoc among producers delivering to these mills.
“Cane is a low-value, high-volume crop and it is extremely expensive to transport. The Tongaat Hulett Amatikulu mill, for example, would typically have 40 000ha of sugar cane. The maximum viable delivery distance to this mill is between 50 and 60km. Should this mill close, it will have a devastating effect. All the other mills are already functioning at full capacity from their own supply area, with very little ability to take up additional cane. This would leave producers who supply to Amatikulu without the ability to have their cane crushed.”
According to Thandokwakhe Sibiya, COO of the South African Farmers Development Association, the closing of these mills will affect around 60% of small-scale cane producers. The industry is, however, doing everything in their power to salvage the situation and protect the livelihoods of the affected producers and the interests of the industry.
Master plan
The South African Sugar Industry Master Plan (Vision 2030), explained Mhlaba, is a collaborative framework between government and industry, designed to stabilise and transform the sector into a sustainable and globally competitive value chain. Key aims include protecting jobs, supporting small-scale growers, and diversifying into products such as aviation fuel and bioethanol.
Key objectives are the industry’s long-term sustainability by transitioning from a sugar-focussed industry to a diversified, sugarcane-based bioeconomy; advancing the ownership and participation of black producers and women within the industry; and protecting existing jobs and creating new opportunities in the broader value chain.
Phase one of the master plan has been completed, and phase two will focus on deeper restructuring and implementing diversification projects. Task teams have been established to investigate possibilities related to bioethanol for blending with petroleum, sustainable aviation fuel, bioplastics, biochemicals, and food additives.
Health promotion levy
A thorn in the flesh of the industry, however, is the health promotion levy (HPL) introduced in April 2018 to address obesity and non-communicable diseases. In 2017, said Mhlaba, the industry warned against implementing HPL without mitigating measures, as it would compromise the sustainability of the industry. The industry views this tax as a barrier to the master plan’s success and has called for its review.
The levy resulted in the loss of at least 20 000 jobs in the industry and played a role in the closure of two sugar mills.
SASA’s view, said Mhlaba, is that obesity, type 2 diabetes, and heart disease are complex issues driven by genetics and lifestyle – not just one ingredient. Sugar is a natural product that can be enjoyed as part of a balanced, healthy lifestyle when consumed in moderation. Singling out sugar ignores the role of caloric intake and sedentary behaviours in public health challenges.
Increases in the HPL, he pointed out, will undo the progress achieved through phase one of the master plan and will be detrimental to transformation. Furthermore, there continues to be no credible studies linking the tax to positive public health outcomes. – Izak Hofmeyr, Plaas Media
