Up or down: which way will the sugar import tariff trigger go?

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Four increases in the sugar import tariff in 2025 could not stem the flood of cheap imported sugar into South Africa.

According to calculations by grower body SA Canegrowers, 177 408t of sugar entered the country in the first 11 months of 2025. Over the same period in 2022, this tally was less than 3 000t.

The body said in a media release dated 26 January that imported sugar “has displaced locally grown sugar in the market”, leading to losses amounting to some R733 million across the value chain.

READ Mpumalanga sugar industry acts against huge surge in imports

Yet the local non-alcoholic beverage industry wants government to reduce the threshold at which local tariff protection is activated, which could potentially allow even more sugar imports to displace local sugar cane growers’ output.

The import tariff on sugar in South Africa is linked to the world sugar price. When the latter drops below a predetermined level, which is known as the dollar-based reference price (DBRP), an import tariff is triggered.

In a notice published in a Government Gazette on 22 January, the International Trade Administration Commission of South Africa (ITAC) said the South African Sugar Association had applied for the DBRP to be increased by around 33%, from the current US$680/t (about R10 880/t) to US$905/t (R14 480/t).

“Subsequently, the Beverage Association of South Africa (BEVSA) applied for a reduction in the current DBRP from US$680/t to between US$552/t [R8 840/t] and US$650/t [R10 400/t], citing, among other reasons, the adverse impact of current duties on beverage producers, bottlers, consumers, etc.,” ITAC added.

BEVSA’s request is for a 2% to 19% reduction in the threshold at which tariff protection is triggered.

Applications combined

ITAC said in the notice that these “divergent applications submitted by industry stakeholders prompted a need to determine the most appropriate course of action” and would include the strategic objectives outlined in the South African Sugar Value Chain Master Plan 2030.

“After extensive engagements between government and industry stakeholders, it was agreed that a combined evaluation of both applications represents the most efficient and equitable approach to address the diverging requests regarding the appropriate level of the DBRP,” it added.

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SA Canegrowers said in its statement that a lower DBRP “may deliver short-term benefits to sugar importers and BEVSA members, but the longer-term impact would decimate the domestic value chain”.

“It is critical that the DBRP is assessed against the realities of the global sugar market and continues to function as part of a fair South African trade policy,” it continued.

“The current DBRP is already not appropriately calibrated to these market realities and has allowed a record surge of imported sugar to enter the country and displace locally grown produce. Not adjusting the DBRP to a fair level puts rural livelihoods at risk.

“The global sugar price fluctuates, and the current low price will not last forever. Destroying the local sugar-producing industry for short-term gain is short-sighted and will only harm South Africa’s economy in the long run.

“The surge of sugar imports, which would only worsen if BEVSA’s lower DBRP calculation is accepted, will push many growers out of business. The rural economies of KwaZulu-Natal and Mpumalanga depend on the 27 000 small-scale and 1 100 large-scale growers who provide vital stability and economic activity in their communities. Over a million livelihoods depend on the sugar industry, and a lower tariff regime with the resultant flood of imported sugar will be devastating.”

SA Canegrowers said it will “participate constructively” in ITAC’s review process, “with the expectation that full and proper regard is given to the risk facing rural jobs and livelihoods”.

“Were there to be a collapse in domestic sugar production as a result of heavily subsidised cheap sugar imports entering South Africa, the country risks job losses and increased poverty,” it added.

Tariff see-saw

Throughout 2025, SA Canegrowers warned that the long wait between the triggering and implementation of a tariff adjustment was causing damage to the local market.

Two significant increases in the import tariff were introduced last April – first from R2 348,92/t to R2 862,50/ t on 4 April, and then to R3 773,50/t on 11 April – on the back of steep decreases in the world price.

However, during a short-lived increase in the world price early in May, the import tariff was reduced to R2 828,50/t on 9 May. Shortly afterwards, the world price started dropping again, but the tariff remained unchanged until 1 August, when it increased to R3 646,80/t. A further tariff hike followed on 5 December, when it rose to R4 363,80/t.

The world price has continued its downward trajectory since December 2025 and, at the time of writing, end of January 2026, was at its lowest point since late March 2021.

The Food and Agriculture Organization of the United Nations’ (FAO) Sugar Price Index ended 2025 24% lower than the year before. In addition, on 9 January, the FAO said on its website that “expectations of ample global sugar supplies in the current season, supported by good harvest progress and favourable production prospects in India, limited the upward pressure on world prices”.

‘A lose-lose situation’

“At Nedlac’s Trade and Industry Chamber, we have repeatedly raised the issue and will continue to do so,” he added.

Boshoff said Agbiz had met with ITAC Chief Commissioner Ayabonga Cawe about the issue in the final quarter of 2025.

“The challenge, as I understand it, lies with the legislative framework, which requires ITAC to conduct the calculations once the trigger is picked up, but then requires concurrent sign-off from the minister of Trade, Industry and Competition and the deputy minister of Finance.

“This process is supposed to take a maximum of six weeks, but our experience of late is much, much longer,” he said.

Boshoff added that industry is “pushing government to commit, in some form or another, to time-bound metrics that would bring [the implementation of tariff adjustments] back to six weeks”.

“The agriculture sector is, of course, a net exporter, so we need to be cautious that the protection we provide to local industries does not come at the expense of our export-led industries. In other words, we must follow the rules-based approach so that other countries cannot retaliate against us.

“Our challenge is not a policy challenge but an implementation challenge. Our current system is nowhere near agile enough to provide industries with the protection they need and to which they are entitled.

“As a result of interdepartmental bureaucracy, industries suffer, but government also loses vast amounts of revenue that it could have realised via import tariffs. It is a lose-lose situation, and we desperately need to get to the bottom of why it takes so long to implement decisions after ITAC has made a recommendation,” Boshoff stated.

“If it is a capacity issue within the state, then the creation of additional capacity would pay itself off numerous times over via increased revenue to the state flowing from tariffs that should be raised following a trigger event.

“What the [sugar] industry, as a whole, needs is predictability. Producers, importers, millers, and other industry players would all benefit from greater predictability. If all stakeholders can rely on tariffs being imposed within six weeks of a trigger event, they can all plan accordingly,” he concluded.