Sugar industry sours as cheap imports threaten local jobs
· Citizen
South Africa’s sugar industry desperately needs state action to protect it against cheap imports threatening livelihoods and local jobs.
Industry leaders are concerned that two years since the local sugar industry, including SA Canegrowers, asked the International Trade Administration Commission (Itac) to review the price and whether it should be increased, government has not stopped low-priced sugar entering the local market.
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Two years since local industry asked trade commission for review
Itac was established to create an enabling environment for fair trade and provide technical advice to the department of trade, industry and competition.
SA’s sugar market is increasingly saturated by low-cost imports, most from Brazil, India and Thailand, supplemented by regional supply from Eswatini.
These nations leverage government subsidies and ethanol integration schemes, enabling them to release surplus sugar internationally at prices that undercut local producers.
SA Canegrowers is alarmed that government is dragging its feet and that imports have flooded in, threatening industry sustainability.
Itac has conducted a review and its final proposal is now with Minister of Trade, Industry and Competition Parks Tau for his signature.
Asking Itac to review dollar-based reference price
“But SA Canegrowers does not know if it will be an adjustment that supports the sugar industry, or when Tau will sign it into law. It might come as early as the end of this week,” said SA Canegrowers CEO Thomas Funke.
At issue is the dollar-based reference price, a floor price set in dollars per ton, meant to represent what it costs local farmers and millers to produce sugar competitively.
If the world sugar price falls below the reference price, tariffs kick in.
The dollar-based reference price was last adjusted in 2018 and no longer reflects the sugar production costs.
Last year, Tau published draft regulations that permit consultations on the procurement of over 90% local sugar by growers, millers, retailers and food and beverage manufacturers, without breaching the Competition Act.