South African sugar industry faces double blow from tariffs and cheap imports

The South African sugar industry is facing a significant threat from a 30% tariff on sugar exports to the United States, set to take effect on August 1.

According to SA Canegrowers, representing 24,000 small-scale farmers and 1,200 large-scale growers, this move could render South African sugar uncompetitive in the US market.

The industry is already under pressure from cheap, subsidised imports from countries like Brazil, India, and Mexico, which are flooding the local market and undercutting local producers. The global sugar market is heavily distorted, with some countries providing extensive subsidies and incentives to their sugar producers, keeping international prices artificially low.

Impact on local industry:

• For every ton of imported sugar, the industry loses R6,000.
• In 2023/24, 25,000 tons of sugar were imported from outside the Southern African
• Customs Union (SACU), increasing fourfold to over 100,000 tons in the following year.
• The industry supports over a million livelihoods across the value chain.

SA Canegrowers is urging the South African government to protect the local industry from unfair trade practices by ensuring that the import tariff regime is up to date with market realities.

SA consumers don't benefit, by the way

This would help level the playing field, provide fair pricing, and protect precious jobs in an already struggling economy.

The industry emphasises that subsidised sugar imports do not necessarily lead to cheaper sugar for local consumers, as importers use the price differential to increase their profits. Instead, locally grown sugar is displaced, and thousands of jobs are put at risk.

The government’s prompt action is crucial to safeguard the local sugar industry and the livelihoods it supports.