Sugar duty raise means first import duty in four years

South Africa’s International Trade Administration Commission (Itac) increased the dollar-based reference price of sugar by 58%, meaning importers will have to pay tariffs on shipments of sugar for the first time in four years, Bloomberg News reported.

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The reference price was increased to US$566/t (R5 933/t) on April 4, from US$358/t (R3 752/t), said Itac.

The previous benchmark “offered no protection to the local industry,” said South Africa Sugar Association executive director Trix Trikam.

While the new level “will provide a measure of protection for the sugar industry” current world sugar prices and exchange rates mean “there is a possibility that the tariff may not curb imports,” he told Bloomberg.

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The sugar price fell for three consecutive years through 2013, slumping 42% on NYSE Liffe in the period after growers from Brazil to Australia raised output, leading to a global surplus and making it cheaper to import and harming SA producers.

The country is Africa’s biggest producer of sugar and its retail price is among the lowest globally, said Trikam.