SA Canegrowers has welcomed the decision by the Minister of Trade, Industry and Competition Parks Tau, to gazette regulations enabling retailers, food and beverage manufacturers, millers and growers to collectively negotiate the purchase of mainly local sugar without contravening the Competition Act.
By Maile Matsimela, Digital Editor at African Farming
The association, representing 24 000 small-scale growers and 1 200 large-scale growers, wrote to Minister Tau in early August to ask him to fast-track the process. Tau published the draft exemptions for public comment in May and finalised them by mid-August.
Five-year Exemption Enables Industry-wide Discussions
“The exemption from competition regulations will allow industry-wide discussions without fear of falling foul of the Competition Act for a period of five years. Such discussions include working towards commitments from local commercial users of sugar and retailers to use and stock mainly locally produced sugar,” SA Canegrowers Chair Higgins Mdluli said.
The exemptions will also allow talks on diversifying the industry into sectors such as sustainable aviation fuels to enable long-term growth.
Call For Commitment To Local Sugar Procurement
SA Canegrowers is urging food and beverage manufacturers as well as retailers to commit to buying mainly local sugar, stressing that the industry supports about one million livelihoods. The exemptions, together with voluntary commitments to buy sugar, will be vital to protecting the industry from cheap sugar imports from countries that heavily subsidise their own sugar industries.
Cheap Imports Threaten Local Industry
Cheap sugar imports into South Africa offer no benefit to consumers but boost importers’ profit margins. “The South African sugar industry is a national asset. We support local jobs and farming, yet our market is being flooded by cheap, subsidised imports. This displaces local sugar, jeopardising countless jobs and the stability of the rural economies of Mpumalanga and KwaZulu-Natal. We call on retailers and commercial users of sugar to buy local,” said Mdluli.
US Tariff Impact On Export Competitiveness
The new US tariff is also a blow to South African growers, reducing the competitiveness of local sugar in a key export market. The US produces insufficient cane sugar domestically and relies on imports to meet demand. Until earlier this year, the US controlled its sugar imports through a quota system, and South African sugar did not disadvantage US growers.
SA Canegrowers is calling on the government to prioritise negotiations with the US to finalise a mutually beneficial trade deal, either through a tariff exemption for sugar or a reinstatement of the previous US quota system.
