Now sugar producers want protection

Addressing the media on the challenges facing sugar producers during a tour in Malelane, near Nelspruit in Mpumalanga, on Friday (15 March), Trix Trikam, executive director of the South African Sugar Association, said jobs were being compromised by cheap imports, largely from Brazil. He partly blamed these imports for the drastic reduction in the number of small cane growers from 50,000 to 25,500.

Sugarcane is the second-largest crop grown in South Africa after maize, generating about 2.2m tons of sugar per season worth R12bn in revenue a year.

However, over the past few years South Africa has gradually allowed imports of up to 240,000 tons of sugar annually, which was equivalent to the production of two average-sized local mills, posing a serious threat to the profitability and sustainability of mills and an estimated 16,000 jobs, according to Trikam. Urban wholesalers and major value chain agri-processing industries were the main importers of sugar.

South Africa has about 1,730 large-scale sugarcane growers who produce 83.21% of total sugarcane production. Milling companies with their own sugar estates produce 7.48% of the crop and small-scale growers produce about 9.31%.

Trikam said the South African Sugar Association was lobbying the government to impose some quotas for international sugar imports so that importers could reduce the amount of sugar bought into the country.

It is also urging the Department of Trade and Industry to include South Africa's sugar sector in negotiations between the South African Development Community and the European Union (EU) over the Economic Partnership Agreement and to reduce tariffs, and the sugar industry had asked that local producers are granted an average quota of 320 000 tons a year for Europe where there is currently a sugar shortage.

This would bring much-needed foreign currency relief and could assist in stabilising the sugar-producing sector, Trikam said.

Source: Business Day via I-Net Bridge