This is up from 16,8 million tons in 2011/2012 to produce an estimated 2,31 million tons of saleable sugar, up from 1,82 million tons. However, sugar imports are taking the shine off these prospects. Maidstone commercial sugarcane grower Roy Sharma, president of the World Association of Beet and Cane Growers (WABCG), said cheaper sugar imports from Brazil and India were forcing SA to export its surplus onto a non-viable dumped market.
Sharma said that next year SA would have a surplus of 400 000t of sugar, which will have to be sold on the world market at a loss to growers. Canegrowers executive director David Wayne said that with the prospect of generating renewable energy at mills some time off, retailers and consumers needed to concentrate on buying local. “We’re feeling the impact of sugar imports, which have reached about 20 000t/month and displace local sales.
“We should not totally exclude imports. But imports are replacing the production of up to two smaller mills, which offer socio-economic benefits in deep rural areas. Buying cheaper sugar doesn’t help to maintain jobs. We need to find the balance between what’s good for the consumer and employment.” Canegrowers has been meeting with retailers to put forward the “buying local” concept.
“We’re not asking the country to support an inefficient industry,” Wayne said. “SA sugar producers are still in the top quintile in terms of low-cost producers. But the dollar-based reference price (sugar tariff) is at zero and not an effective tariff. It doesn’t give the local industry adequate protection.”
The industry was also in discussions with government and the EU to address the issue of preferential access to the EU. The economic partnership agreements (EPAs) between the Southern African Development Community and the EU affords Least Developed/African Caribbean Pacific (LD/ ACP) countries duty-free access to the EU sugar market. SA is not classified as an LD/ACP country, and the local sugar industry would like to gain access. However, Tongaat Hulett said prices that would be achieved by LD/ ACPs into the EU were uncertain.
“The market is currently over-supplied,” said Tongaat Hulett CEO Peter Staude. “Sugar is being released from out-of-quota EU beet sugar at reduced levies and from world market sugar at reduced duties. For the first time since the introduction of the current duty and quota free regime in 2009 for LD/ACP countries, the benefits of selling into the EU are being eroded. “In the regional markets, a period of pressure on selling prices and pressure from imports could prevail if the world price remains low and pricing into Europe remains under pressure,”