Worry over possible job losses in South Africa's sugar industry amid tariff review

South Africa’s sugar industry has issued strong warnings that a review of the sugar import tariff could place hundreds of thousands of rural livelihoods at risk if it results in weaker protection against cheap, subsidised imports.

Both SA Canegrowers and the South African Farmers Development Association (SAFDA) say they will participate in the International Trade Administration Commission of South Africa’s (ITAC) newly gazetted review process, but stress that the outcome must take into account the severe pressure already facing domestic producers.

The SA Canegrowers said it expects the review to give “full and proper regard” to the threat posed to rural jobs and livelihoods.

The organisation warned that “were there to be a collapse in domestic sugar production as a result of heavily subsidised cheap sugar imports entering South Africa, the country risks job losses and increased poverty.”

According to SA Canegrowers, growers are already absorbing heavy financial losses.

“In 2025 this impact has already been in the region of R733 million, as imported sugar has displaced locally grown sugar in the market,” the organisation said.

Central to the review is the Dollar-Based Reference Price (DBRP), which determines the level of the tariff applied to imported sugar.

SA Canegrowers argues that the DBRP is no longer fit for purpose. “The current DBRP is already not appropriately calibrated to these market realities and has allowed a record surge of imported sugar to enter the country and displace locally grown produce,” it said, adding that “not adjusting the DBRP to a fair level puts rural livelihoods at risk.”

The organisation’s analysis shows that 177,408 tons of duty-paid sugar entered South Africa between January and November 2025, compared with less than 3,000 tons over the same period in 2022.

SA Canegrowers said this surge occurred “despite the tariff on imported sugar being adjusted to align with the world sugar price” and is “a clear indicator that the DBRP – the mechanism to calculate the import tariff – is outdated.”

SAFDA welcomed ITAC’s decision to conduct a combined assessment of applications from the sugar and beverage industries. The association said the process provides “an important opportunity for farmers and industry stakeholders to present their views and to demonstrate the deleterious impact that deep-sea sugar imports are having on the local sugar industry.”

SAFDA highlighted the fragile state of the sector, noting “the business rescue status and declining viability of several sugar mills,” which it said poses “a serious threat to the sustainability of the sector.” The association warned that the tariff of US$680 per ton on imported sugar, gazetted in 2018, “has become ineffective over time and no longer provides adequate protection.”

Import volumes remain a key concern, SAFDA said, emphasising that there was “a 123% increase compared to import levels during the same period in the 2024/2025 season”.

These imports, the association said, are forcing local producers to divert sugar to export markets “at a significant loss of approximately R7,700 per ton of exported sugar.”

The knock-on effects are being felt directly by farmers. SAFDA warned that declining revenues are putting downward pressure on cane prices, with the risk that “farmers may lose their retentions or even end up owing millers when final sugarcane payments are reviewed and adjusted, should further imports enter the local market.”

While beverage industry bodies have argued for a lower DBRP, SA Canegrowers cautioned that such an approach would offer only short-term relief to importers.

“Destroying the local sugar-producing industry for short-term gain is short-sighted and will only harm South Africa’s economy in the long run,” the organisation said, pointing out that global sugar prices are cyclical and current low prices “will not last forever.”

Both organisations stressed the broader economic stakes. SA Canegrowers noted that rural economies in KwaZulu-Natal and Mpumalanga depend on “the 27,000 small-scale and 1,100 large-scale growers, who provide vital stability and economic activity in their communities,” adding that “over a million livelihoods depend on the sugar industry.” SAFDA echoed this concern, saying a “sustainable sugar industry is critical to retaining jobs, supporting a just transition to clean energy and diversified products, and stabilising regional economies.”

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