Industry body SA Canegrowers has welcomed a proposed exemption by the Department of Trade, Industry and Competition (dtic) that would support employment and growth in the sugar industry. 

Under newly proposed draft regulations, South African retailers and commercial food and beverage producers would be allowed to negotiate with sugarcane growers and millers to secure a commitment to prioritise procuring local sugar instead of imports.

“Such a commitment will support the more than one-million livelihoods that the South African sugar industry sustains,” SA Canegrowers states.

This is if the draft regulations for a block exemption from Competition Commission regulations, published earlier this month by the Trade, Industry and Competition Minister Parks Tau, is passed into law.

SA Canegrowers welcomes these draft exemptions, as it will allow for joint planning, inclusive decision-making, and stability in the sector, without violating competition laws. It will also allow for negotiations that will create a fair pricing structure for consumers.

“Commercial users are a key market for local sugarcane growers, and securing a commitment to use local sugar will safeguard tens of thousands of rural jobs in KwaZulu-Natal and Mpumalanga,” says SA Canegrowers vice-chairperson Andrew Russell.  

He explains that, normally, cooperation and negotiation between independent entities would be in contravention of Competition Commission regulations, but the dtic has recognised that the South African sugar industry is vital to the economy and an essential provider of jobs in rural areas of South Africa. 

The proposed exemptions were negotiated as part of the ongoing Sugarcane Value Chain Master Plan 2030, a social compact between the broader sugar industry and the government aimed at stabilising the sector, saving jobs and promoting transformation and sustainability.

The sugar industry – and especially the thousands of sugarcane growers – are facing increasing threats to its sustainability, including imported sugar flooding the market and the negative effects of the Health Promotion Levy.

The Master Plan process has been essential in investigating ways to diversify into other products such as biofuels or sustainable aviation fuels.

The draft exemptions will also enable negotiations to take place that will be necessary for diversification projects to get off the ground, as some level of collaboration and coordination between independent sugar industry parties will be required to secure investment into new technologies, industries, and processes.

SA Canegrowers welcomes Tau and his department’s commitment to the sugar industry. “His support has been critical for the thousands of farm-level jobs and will be critical if sugar industry diversification is to succeed,” Russell concludes.