John Steenhuisen, minister of agriculture, has now also voiced his serious concerns for the South African sugarcane value chain following recent news that the sugar milling giant, Tongaat Hulett, is likely to be placed under provisional liquidation.
By Lloyd Phillips, senior journalist at African Farming and Landbouweekblad
Tongaat Hulett’s reportedly failed business rescue has prompted its business rescue practitioners to lodge an application for the company to be placed under provisional liquidation.
A statement from Steenhuisen’s ministry says this application forms part of an escalating crisis for the sugarcane value chain that is already dealing with various other critical challenges and risks, including competition from hundreds of thousands of tonnes of reportedly highly subsidised sugar from outside the Southern African Customs Union being dumped on the South African market.
The 134 years old Tongaat Hulett owns three sugar mills in South Africa that can collectively process up to 4,8 million tonnes of the country’s annual sugarcane production of around 17 million tonnes. As many as 15 000 or so sugarcane growers, many of them at small-scale, supply their harvests to these mills.
Steenhuisen says: “This is not a theoretical risk. It is an immediate economic threat to rural communities. If [Tongaat Hulett’s] mills do not open [from the start of the 2026-’27 milling season in April], farmers cannot harvest, workers cannot earn an income and entire local economies will stall. The longer the uncertainty persists, the greater the damage becomes.”
Also read: Sugar industry faces devastating crisis: Tongaat Hulett heads for liquidation as Vision Deal collapses
Urgent Efforts To Secure Urgent Solutions
The department of agriculture says it is urgently engaging with industry stakeholders, the relevant state departments and with “financing stakeholders” to hopefully support a practical solution that unlocks funding and restores operational certainty for Tongaat Hulett’s South African operations.
Steenhuisen states further: “Our objective is not to intervene in commercial negotiations, but to ensure that a viable path forward exists [for Tongaat Hulett]. The immediate priority must be keeping the [sugarcane milling] season alive.”
He emphasises that South Africa’s sugarcane value chain, which generates R25 billion revenue annually, remains a strategic contributor to rural economies and food value chains. Allowing the production of sugarcane, sugar and other sugarcane-based products to collapse will have far-reaching socio-economic consequences “well beyond the farm gate”.
“Government’s concern is simple: The crop cannot wait. Agricultural production works on biological timelines; not legal or financial ones.”
Keep an eye on www.africanfarming.com this afternoon for our overview of the key challenges that threaten South Africa’s sugarcane value chain, and our video interviews with leaders in this 178-year-old agricultural sector that reportedly supports one million livelihoods, most of them in rural areas.
Also read:
Relief and more questions follow last-minute rescue for Tongaat Hulett
Sugarcane growers unite against ‘outdated’ tariff protection mechanism
Premier commits support to Mpumalanga’s ‘vital’ R5.5 billion sugar industry
