Industry organisation the South African Cane Growers' Association (SA Canegrowers) has called on food and beverage manufacturers and retailers to commit to buying mainly local sugar in order to support the industry on which one-million livelihoods depend.

This follows Trade, Industry and Competition Minister Parks Tau’s gazetting, on Wednesday, of regulations that will allow retailers, food and beverage manufacturers, millers and growers to collectively negotiate on buying mainly local sugar without the talks breaching the Competition Act.

The exemptions will also allow talks on diversifying the industry into sectors such as sustainable aviation fuels to enable long-term growth, the organisation says.

“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,” says SA Canegrowers chairperson Higgins Mdluli.

The exemptions and voluntary commitments to buy sugar will be critical in safeguarding the industry from cheap sugar imports from countries that heavily subsidise their own sugar industries, he says.

The cheaper sugar imported into South Africa does not benefit consumers, but only allows importers to make higher profit margins.

“South Africa's sugar industry is a national asset that supports local jobs and farming. However, our market is being flooded by cheap, subsidised imports, which displace local sugar, jeopardising countless jobs and the stability of the rural economies of Mpumalanga and KwaZulu-Natal,” he says.

Meanwhile, the US’s 30% tariffs on products imported from South Africa is a blow to South African canegrowers, making sugar less competitive in a crucial export market. The US does not grow enough of its own cane sugar and has to import to supplement its domestic demand.

Until earlier this year, the US had controlled its sugar imports through a quota system, and South African sugar did not negatively impact on US growers, Mdluli points out.

“SA Canegrowers urges the government to prioritise negotiations with the US to finalise a mutually beneficial trade deal, which would include a tariff exemption for sugar, or a return to the previous US quota mechanism.”