Effective 28 August, the International Trade Administration Commission of South Africa (ITAC) has increased the dollar-based reference price (DBRP) for sugar from US$680/t (around R10 870/t) to US$785/t (R12 550/t). The accompanying customs duty has risen by roughly 44% from 483,72c/kg to 697,92c/kg, according to the South African Revenue Service (SARS).
The move ends an eight-year period during which the DBRP remained at US$680/t, despite substantial changes to global sugar prices and local production costs. The price change also follows an almost two-year review that sought to balance the sharply contrasting interests of sugar producers and downstream users.
However, while producers have welcomed the move, the industry at large believes US$785/t is a compromise rather than a complete solution.
Two opposing applications
According to the South African Sugar Association (SASA), the impact of cheap sugar imports has been significant, with imports displacing locally produced sugar from the domestic market and leaving growers and millers with lower returns.
Consequently, local producers have had to export more of their own sugar, often at lower prices, adding to the financial pressure on an industry that supports thousands of jobs and rural livelihoods.
The tariff review began with two competing applications.
SASA applied on 30 October 2024 for the DBRP to increase from US$680/t to US$905/t (R14 455/t), arguing that stronger protection was needed to safeguard the sustainability of the domestic industry.
The Beverage Association of South Africa (BEVSA), representing downstream beverage interests, subsequently applied on 25 September 2025 for the DBRP to be reduced to between US$552/t and US$650/t, citing the adverse effect of import duties on beverage producers, bottlers, and consumers.
The opposing applications prompted the ITAC to combine the issues into a self-initiated investigation under Section 16(1)(d)(ii) of the International Trade Administration Act (No. 71 of 2002).
The original applications were incorporated into the broader review, which considered the interests of both upstream producers and downstream sugar users.
In a statement, the ITAC said its investigation found that the domestic sugar industry was operating in a difficult environment characterised by volatile international sugar prices, rising imports, increasing production costs, declining production and capacity utilisation, and deteriorating profitability.
At the same time, downstream sugar-using industries were also experiencing higher input and operating costs, although the ITAC found that the non-alcoholic beverage industry had generally maintained positive growth in production, sales, and capacity, the statement said.
The commission therefore concluded that neither SASA’s proposed US$905/t nor BEVSA’s proposed lower range would adequately balance the competing interests.
How the new tariff works
The DBRP is not simply a fixed import duty. It is the benchmark underpinning South Africa’s variable tariff system. When the international reference price falls below the DBRP, an import duty is applied to bridge the gap and prevent low-priced imports from undercutting domestic producers.
The ITAC concluded that the mechanism remains appropriate because it provides “transparency, predictability, and administrative consistency”.
ITAC set the new sugar reference price at US$785 a tonne based on a six-year average international sugar price, adjusted upwards to account for distortions in the global sugar market and then reduced to take average shipping costs into account.
Using the international sugar price at the time, ITAC calculated an import duty of R6 979,19/t or 697.92c/kg.
The duty will not be fixed. ITAC will monitor international sugar prices using a 20-trading-day average. If that average moves by more than US$20 a tonne from the previous trigger level for 20 consecutive trading days, the duty will be recalculated.
The new duty will take into account the latest international sugar price, the rand/dollar exchange rate and South Africa’s real effective exchange rate.
However, the duty cannot exceed South Africa’s maximum WTO-bound tariff of 105% of the value of the imported sugar.
The ITAC noted that the DBRP will be reviewed after three years, although the commission may review the reference price sooner than that, depending on developments in the global sugar market and domestic industry conditions.
Industry says it’s not enough
For those on the ground, however, the increased DBRP falls short of what they had asked for.
Speaking to Farmer’s Weekly, SASA Vice-chairperson Trix Trikam said that while the association welcomed the development, the new DBRP would not provide sufficient protection against subsidised imports, particularly from countries such as Brazil.
“Based on our calculations and analysis, the envisaged level of US$905/t would have accorded us adequate protection against the devastating sugar imports. Therefore, the gazetted DBRP of US$785/t falls short of what constitutes an adequately calibrated tariff,” he explained.
Trikam noted that cheap sugar imports had already had severe consequences on the local industry.
“We lost R1,6 billion in the 2025/26 season due to the sugar import crisis. In the 2026/27 season, as of June 2026, imports stood at 74 652t, with current industry losses of [R560 million].”
He said SASA would continue engaging government on additional measures to support the industry.
Imports displacing local sugar
The South African Canegrowers Association (SA Canegrowers) also welcomed the adjustment, describing it as important to the sustainability of the domestic industry.
Chairperson Higgins Mdluli said the adjustment in the DBRP shows that government understands the severity of the crisis that sugar cane farmers are facing.
However, he warned that the new benchmark might not close the gap created by the influx of imported sugar.
Mdluli explained that duty-paid sugar imports had increased more than 70-fold from just 1 619t between January and June 2022 to 124 594t over the same period in 2026.
“Over the same period, local sugar sales fell by approximately 188 000t, or 35%, while grower proceeds declined by R1,33 billion. The proportion of saleable sugar that the industry is forced to sell offshore at a loss rather than into the domestic market has increased from 22% to 37%.”
He added that growers would now watch the market closely.
“We are encouraged that government has acted, but we will be watching closely over the coming months to see whether this adjustment translates into a genuine reduction in the volume of imported sugar entering the country.
“Growers need certainty, not another partial fix. We remain ready to work with government and all stakeholders to ensure the sugar industry can compete on a fair footing,” Mdluli said.
Millers warn against complacency
The South African Sugar Millers’ Association (SASMA) has also lauded the decision, but said the real test would be whether imports actually reduced as a result of the increased DBRP.
CEO Jenna Govender said the increase was an acknowledgement of the extraordinary pressure facing the domestic industry after eight years at the US$680/t benchmark.
However, she warned that “acknowledging a crisis and resolving it are two different things”.
She said the real measure of the new tariff would be whether it prevented imported sugar from displacing local production.
Govender said the findings of the ITAC’s investigation, which included rising import penetration, higher production costs, declining production and mill capacity utilisation, falling domestic sales, and deteriorating profitability, should concern South Africans seeking to preserve local manufacturing capacity.
“These findings should concern every South African interested in preserving domestic manufacturing capacity. Sugar milling is one of the foundations of rural industrialisation in KwaZulu-Natal and Mpumalanga.”
Govender added that the industry needed to use the new tariff as a platform for diversification into products such as bioethanol, sustainable fuels, electricity, bioplastics, biogenic carbon dioxide, and animal feed.
However, she explained that “diversification requires capital, capital requires confidence, and confidence requires a domestic market in which investors can reasonably expect South African productive capacity to have a future”.
She said the impact of the US$785/t DBRP should be monitored against import volumes, local sales, production, mill utilisation, employment, and the financial sustainability of growers and millers.
“If imports continue at levels that materially displace domestic production, South Africa must be prepared to act again. We should not wait three years to respond,” Govender said.
Illovo calls for further protection
Illovo Sugar South Africa has been more critical of the outcome. Managing director Ricky Govender said the US$785/t DBRP fell short of what was needed to protect the domestic industry.
He said 213 322t of sugar from outside of the Southern African Customs Union entered South Africa during the 2024/25 season, reducing grower revenue by approximately R1 billion and miller revenue by about R500 million.
“The outcome did not adequately respond to the scale of pressure facing growers, millers, and the broader rural economies reliant on the sugar industry.”
Illovo has called for urgent short-term safeguard measures against deep-sea imports, another review of the DBRP, and a tariff framework that responds more rapidly to changing import volumes and market conditions.
He said that a two-year review process followed by a three-year review cycle could leave the industry exposed to rapidly changing market conditions.
Labour backs tariff protection
Organised labour has largely sided with producers in the tariff debate.
The Congress of South African Trade Unions (COSATU) welcomed the increase, describing it as a critical intervention to protect the sugar industry, its value chains, and jobs.
COSATU parliamentary coordinator Matthew Parks said in a statement that the federation supported the increase, but warned that tariffs alone would not resolve the industry’s problems.
COSATU has called for action on several fronts, including lower electricity costs for farmers and mills, improved rail and logistics infrastructure, a stronger ‘buy local’ campaign, a crackdown by SARS on illicit and under-invoiced imports, and dedicated support for emerging growers.
The federation has also linked the tariff issue to the current labour dispute in the sugar industry, with workers represented by the Food and Allied Workers Union (FAWU), the Association of Mineworkers and Construction Union, and the United Association of South Africa still on strike over wages and benefits.
FAWU confirmed in August that its members in the sugar manufacturing and refining industry had resumed strike action after wage negotiations failed to produce an acceptable settlement.
The current labour dispute involves workers’ demands for a 13% wage increase, compared with an employer offer of 5,4%.
Downstream users remain concerned
The DBRP increase has naturally been less well received by downstream sugar users.
BEVSA argued during the ITAC’s tariff review process that the existing tariff placed a financial burden on beverage producers, bottlers, and consumers, thus it sought a lower DBRP.
Following the decision, BEVSA CEO Mpho Thothela said the organisation was reviewing the ITAC report and assessing its impact on beverage producers, bottlers, and consumers.
He said the association was consulting with industry members and experts before issuing a unified response, given the complexity of the issues involved.
