Itac to assess proper level of dollar-based reference price for sugar amid competing pleas from industry
The International Trade Administration Commission of South Africa (Itac) will conduct an investigation into the appropriate level of the dollar-based reference price (DBRP) for sugar.
This follows after Itac received two applications from industry value chain stakeholders, one asking for an increase in the DBRP and one asking for a decrease.
The South African Sugar Association applied for an increase in the current DBRP from $680/t to $905/t, citing the need to protect the local sugar industry and ensure its sustainability, especially amid a surge in sugar imports.
Sugar producers have warned that the sector is facing immense pressure from imports and asked that import tariffs be increased, as well as that the sugar tax be scrapped.
In turn, the Beverage Association of South Africa applied for a reduction in the current DBRP from $680/t to between $552/t and $650/t, citing the adverse impact of current duties on beverage producers, bottlers and consumers. These producers face rising input costs driven by energy, water use and regulatory compliance, coupled with a high level of competition in the market.
The divergent applications submitted by industry stakeholders prompted the need for Itac to determine the most appropriate course of action, including to align with the strategic objectives outlined in the Sugar Industry Value Chain Masterplan.
Itac will solicit comments and gather additional data from all interested parties within the sugar industry value chain as part of the review.
The DBRP is meant to protect the local sugar industry from dumped imports. If imported sugar prices fall below this floor a tariff is triggered to match the price with local break-even costs.
The current DBRP of $680/t has been in place since July 2018.
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