Industry body South African Canegrowers Association (SA Canegrowers) has decried the 8% drop in the final accurate recoverable value (RV) price for the 2022/23 season and asked Industry, Trade and Competition Minister Ebrahim Patel to intervene in light of companies not paying monies that are due.

The RV price is the price growers receive for processed sugarcane.

The RV price drop in the latest season is primarily the result of embattled sugar manufacturer Tongaat Hulett not having paid its dues of R900-million to the South African Sugar Association (SASA) by the end of March. Tongaat has placed its South African entities into business rescue.

The RV price was also impacted by a default on the Gledhow mill’s part, which also entered into business rescue in March.

SA Canegrowers says the defaults are in violation of the Sugar Act and Sugar Industry Agreement, and have lowered growers’ revenue. This places thousands of small-scale and commercial growers at risk of losing their businesses.

In total, the defaults will cost the industry R1.5-billion in the season, of which R1-billion is deducted from the growers’ proceeds – the RV price.

More than 20 000 small-scale growers will have to carry their share of the cost of these decisions, with the RV price dropping by R424/t at the end of the season.

The resulting decline in revenue also threatens the livelihoods of the workers that the small-scale and commercial growers employ.

SA Canegrowers maintains that industrial obligations set out in legislation and the industry agreement are mandatory and apply to all members of the sector.

The association believes the business rescue practitioners (BRPs) of both Gledhow and Tongaat are not meeting their obligations in respect of levies and monies due to industry associations, which serve as critical income sources for SASA and SA Canegrowers and help towards millers’ redistribution.

In its request to Patel, SA Canegrowers has asked that the Minister intervene in the BRPs’ decisions to not pay the amounts owing to the industry. “Even as the industry explores possible legal action, urgent effort is needed to protect the industry’s small-scale growers, workers and value chain partners from financial ruin.

“Decisive action is needed from all role-players to ensure South Africa’s sugar industry is not fatally impacted,” SA Canegrowers concludes.