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SA Canegrowers welcomes the decision by the government to adjust the dollar-based reference price (DBRP) for sugar imports. The upward adjustment is critical to the sustainability of the domestic sugar industry, who currently have to contend with a flood of heavily subsidised sugar imports into the country. However, SA Canegrowers cautions that the adjustment, while welcome, may not go far enough to fully close the gap that has allowed a surge of subsidised imports to displace locally produced sugar from the local market.
“We thank Minister Tau, Minister Godongwana and Commissioner Cawe for listening to the industry and acting on the evidence we have presented over the past two years,” said Higgins Mdluli, chairman of SA Canegrowers. “This adjustment shows the government understands the severity of the crisis facing sugarcane growers.”
The Dollar-Based Reference Price (DBRP) is the benchmark price, set in US dollars, that underpins South Africa’s variable tariff on imported sugar, which was at $680 per tonne from 2018. When world sugar prices fall below the reference price, a tariff is applied to make up the difference, so that imports cannot undercut local producers and flood the domestic market. The newly gazetted DBRP is $785 per tonne.
The lower DBRP has left South Africa open to a surge of imported sugar, with volumes rising sharply over the past two years. Duty-paid imports for the January to June period rose from just 1,619 tons in 2022 to 124,594 tons over the same period in 2026; a more than seventy-fold increase in four years.
Over the same period, local sugar sales have fallen by 35% or some 188 000 tons. 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%.
“We are encouraged that 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,” said Mdluli.
All the various stakeholders in the sugar industry are signatories to the Sugarcane Value Chain Master Plan. SA Canegrowers now calls on all signatories to the Sugar Industry Master Plan – including retailers and food and beverage manufacturers – to recommit to sourcing locally produced sugar.
“Growers need certainty, not another partial fix,” said Mdluli. “We remain ready to work with government and all stakeholders to ensure the sugar industry can compete on a fair footing.”
SA Canegrowers represents 28,000 small-scale and 1,250 large-scale sugarcane growers across KwaZulu-Natal and Mpumalanga, and the sugar industry supports over a million livelihoods from farms to mills to food and beverage producers. – Media statement, SA Canegrowers
