Various stakeholders call for government to urgently introduce remedies to help save the struggling industry.
While the sweet deal sealed between the Industrial Development Corporation (IDC) and the Vision Sugar Group has saved Tongaat Hulett Limited (THL) and cushioned thousands of jobs in the sugar sector, the call now is for the government to move with speed to protect the sugar industry from imports. For years, labour formations and various organisations representing role players in the sugar cane sector have warned that cheap sugar imports, mainly from India, Guatemala, Brazil and Thailand, are killing the struggling industry. The woes are exacerbated by sugar tax, known as the Health Promotion Levy implemented in 2018.
The key players in the industry have proposed safeguards against cheap deep-sea imports which is before the International Trade Administration Commission. Itac is also working on finalising its investigation on the need to adjust the dollar-based reference price for sugar. The SA Canegrowers Association, representing the interest of cane growers, raised the alarm on the spiraling sugar imports flooding the market. The organisation says the status quo places the sugar industry in a precarious position.
“Imports of sugar accelerated sharply last year, with almost 200 000 tons of imported refined sugar entering the country over the course of 2025 due to a low global sugar price, stronger rand/dollar exchange rate and weak tariff protections,” the association said. “Early data from 2026 indicates that imports are still rising and adjustments to the import tariff have had no effect, further undermining the stability of the local industry.” South African Revenue Service data paints a grim picture: South Africa recorded 24 600 tons of deep-sea sugar imports in January 2026. The figure is more than imports for the entire 2020, 2021 and 2022 combined.
Higgins Mdluli, the SA Canegrowers chairperson, blamed the surge in cheap sugar imports on opportunistic agents taking advantage of a low global sugar price and weak local tariffs. “They sell this sugar locally at similar prices to locally produced sugar. The profits go to the import agents and result in no savings to consumers in South Africa. This, in turn, means that jobs are being exported at the expense of the SA sugar industry. This surge of imported refined sugar is displacing locally grown and produced sugar from the South African market,” Mdluli said.
As a result of the cheap sugar imports, the sugar sector is estimated to have lost about R1.5bn. On the other hand, Cosatu in KZN also cautioned against the crippling impact cheap sugar imports have on jobs and the economy.
“For now, what is important is that we do appreciate the development we see taking place. When Cosatu took the position of Tongaat Hulett, we were clear that our first and foremost issue, which was our primary demand, was to make sure that the jobs were safe … and the livelihoods of small-scale farmers and everybody else benefitting in the sugar value chain,” Cosatu KZN secretary Edwin Mkhize said . He said Cosatu was also calling for greater accountability from the culprits who had defrauded Tongaat Hulett and almost led to its collapse. “Over and above that, Tongaat Hulett must also be protected from cheap sugar imports which affects the industry and directly has a negative impact on job security,” he said.
The sugar industry forms the backbone of the rural economy in KwaZulu-Natal and the Mpumalanga lowveld region. The sugar belt in both provinces generates more than R25bn annual revenue to the country’s economy. KZN is the highest contributor, at R18.8bn. Mpumalanga contributes about R6bn. Mzwandile Masina, the chairperson of the portfolio committee on trade and industry, said that while sugar sales had recorded some green shoots, more needed to be done to protect the sugar industry.
He cited the Sugar Value Chain Master Plan as a viable instrument to achieving the plan. “The industry still faces challenges such as the pressures from cheap sugar imports, funding uncertainty to enable the implementation of the master plan. This includes the finalisation of pricing and trade protection measures,” he said. The first phase of the Sugar Value Master Plan saw local sugar sales increase from 1.25 million tons to1.55 million tons and the proportion of local purchases by the downstream users increase to 98% of sugar sold which resulted in the growth of the market.
Kaamil Alli, the spokesperson for the ministry of trade, industry and competition, said progress had been made in protecting the sugar industry. “The department has been working very closely with industry. Through Minister [Parks] Tau and Deputy Minister [Zuko] Godlimpi, we have engaged in a process of review of the master plan. “There have been a number of proposals that have been submitted and the DTIC continues to pursue various remedies including trade remedies,” Alli told the Mail & Guardian. He said the department was aggressively easing bottlenecks in the sugar cane sector.
“We will take a decision that ensures we protect the industry while maintaining our obligation in the multilateral trading system. We are also intervening to ensure that our development finance institutions play a role in promoting industrialisation in the agri and agricultural-processing sectors,” he said. The newly signed deal between the IDC and Vision Sugar Group’s key partners forms part of broad-based black economic empowerment and is compliant with both South African and Zimbabwean transformation policies.
Under the new arrangement, Robert Gumede’s Guma Group and the IDC own 68% of Tongaat’s South African operations, while Rute Moyo controls 64% of the Zimbabwean business. The remaining 40% stake in each country is held by Vision Group partners, including the IDC and Guma.
The Mozambican government holds a 15% stake of Tongaat Hulett Mozambique. The arrangement means the IDC has interests in Zimbabwe, South Africa, Mozambique and Botswana. Gumede and Moyo first got involved in a process to acquire THL Zimbabwe and Botswana in 2019, in a deal worth $164m, which was accepted by THL board but had to be cancelled when Zimbabwean businessman Simon Rudland made an offer and underwrote a R4bn rights offer which collapsed after the JSE panel discovered collusion.
SA Sugar faces ‘import crisis’
Sifiso Mhlaba, the exucutive director at the South African Sugar Association (sasa) stated the South Africa’s sugar industry was facing an import crisis.
“Escalating cheap sugar imports (from subsidised countries such as Brazil) are pushing the industry to breaking point – the latest import figures confirm that the crisis is accelerating at an alarming rate. Official data confirms that 19 271 tons of sugar were imported into South Africa at the start of the current season, representing a 95% increase compared to the same period last year.”
Mhlaba also said this was over and above the 213 322 tons of imported sugar that entered the country during the entire previous season, underscoring the relentless surge in import pressure.
“It is anticipated that another 100 000 tons are currently on the water destined for our shores. This would mean that in the last 15 months, more than 330 000 tons would have displaced sugar produced by the equivalent of 3 South African mills. This puts the jobs and livelihoods supported the industry at significant risk.
The industry has already suffered losses of approximately R1.5 billion as a result of subsidised sugar imports, and if this trajectory continues unabated, those losses are expected to at least double during the current season.
There’s an extremely urgent need to accord the industry sufficient tariff protection to cushion against the current avalanche of distortive and subsidised imports entering our shores. Acting on behalf of the industry, the South African Sugar Association (SASA) applied for the upward adjustment of the Dollar Based Reference Price (from $680 to $905 per ton) in October 2024. During this time, the industry has suffered massive financial harm due to the displacement of locally produced sugar. The millers and growers are literally fighting for survival. The very sustainability along with the livelihoods and socio-economic contribution of the industry is at risk. The continued displacement of locally produced sugar threatens the livelihoods of at least one million South Africans who depend directly and indirectly on the industry, including 65 000 direct jobs, thousands of small-scale growers, rural communities and all those who are part of the whole value chain. Without the adequate reference price in place, the industry is headed for an existential crisis. Adequate protection against subsidised imports is a common feature of sugar producing countries worldwide. For example, Mozambique, since 2020, has maintained a benchmark import reference price of $932/ton for refined sugar, this to protect domestic producers from highly subsidised imports. Likewise, many other sugar-producing countries utilise a combination of import controls, tariff protection, tariff-rate quotas, licensing requirements and other trade remedies to preserve the viability of their domestic sugar sectors.
In the case of South Africa, these import-related challenges are further exacerbated by the ongoing impact of the Health Promotion Levy (sugar tax), which has already inflicted multi-billion-rand revenue losses on the industry, contributed to significant job losses and resulted in the permanent closure of two sugar mills in KwaZulu-Natal.
Article Source: Mail & Guardian
