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Africa|Business|Eskom|Financial|Industrial|Systems
Africa|Business|Eskom|Financial|Industrial|Systems
africa|business|eskom|financial|industrial|systems

Shorter season on the cards for sugar industry

Sugarcane plantation in Malelane

Photo by Creamer Media

23rd August 2024

By: Marleny Arnoldi

Deputy Editor Online

     

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Sugarcane crop yields are, so far, on par with prior years and sufficient to supply local demand, industry body South Africa Cane Growers’ Association (SA Canegrowers) confirms.

However, unusually dry weather over the last months in growing regions – KwaZulu-Natal and Mpumalanga – will potentially shorten the season by up to a month, which adds another concern for an industry that has to contend with a range of concurrent challenges.

Up to August 17, local canegrowers delivered more than 10.6-million tons of sugarcane to mills, compared with 10.5-million tons by the same time last year.

The quality of cane delivered was also 2% higher year-on-year.

This means that South Africa’s sugar industry will be more efficient as less cane is required for sugar production, and that the industry will sufficiently supply local demand to commercial, industrial and household consumers, despite the shorter season.

Some mills are already expecting to end production as early as November, which is a month ahead of normal closure. This could potentially leave some growers vulnerable with lower yields across the full season as they could have delivered less cane in total by the end of the season.

A large portion of SA Canegrowers’ 24 000 small-scale growers and 1 200 commercial growers operate in Mpumalanga and northern KwaZulu-Natal, where crops need extensive irrigation. About 30% of total sugar production comes from irrigated areas.

Drier weather means the growers could face restrictions in future when, in fact, they need to extend their irrigation schedules.

ELECTRICITY CHALLENGES

Additionally, given that irrigation systems rely on Eskom-provided electricity, years of steep price increases have had an impact on the already tight margins these growers can achieve for their product.

The recent news of Eskom’s proposed 40% price increases in the works for 2025 and beyond is especially concerning and could lead to these farmers facing an increased financial burden, SA Canegrowers says.

“Small-scale growers who rely on irrigation are especially vulnerable to outrageously high electricity tariff increases. They already operate on thin margins as it is and as such price shocks could push many of them out of business,” comments SA Canegrowers chairperson Higgins Mdluli.

Small-scale growers are at the heart of rural economies in South Africa and often provide jobs and income in areas where there are often very few other alternatives, Mdluli adds.

With threats such as electricity hikes and shorter seasons owing to changing weather patterns, SA Canegrowers is calling on the government to do everything it possibly can to help safeguard local jobs through a well-developed and coherent strategy for the sugarcane value chain, including scrapping the sugar tax, and for consumers to support locally produced sugar.

“It is critical that South Africans support local produce. Doing so helps support the almost one million livelihoods that rely on the local sugar industry,” Mdluli concludes. 

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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