Durban - Sugar industry frontliners, the SA Sugar Association (Sasa) and its arch-rival the Association of Southern African Sugar Importers (Asasi), are locked in a feud over import tariffs, reminiscent of the poultry sector battle whose climax is still widely speculated on.
Sasa fired back yesterday at Asasi’s concerns that introducing import tariffs on sugar would considerably increase the retail price of the staple table commodity.
Asasi said about R6 billion a year would be added to consumers’ shopping bills if the increase was effected in line with Sasa’s crusade. It would “raise production costs for South Africa’s food, beverage and confectionery manufacturers.”
Earlier this year, Sasa requested an import tariff of 50 percent and a review on the “dollar-based reference price”, which is used to govern the international price of sugar.
This tariff translates to an increase from the world price of sugar at $358 (R3 571) to $764 a tonne.
It said local producers were losing about R50 million a month to cheap sugar imports and about 40 000 jobs could be lost.
Asasi argued Sasa’s tariff demands would mean an immediate 44 percent price increase on all imported sugar, affecting the cost of staples such as bread, cereal, tomato sauce and sweets.
“South African consumers are already being hit hard by rising food prices… If enacted, this tariff increase will increase grocery bills further and crush countless small businesses and eliminate thousands of local jobs,” said Asasi chairman Chris Engelbrecht.
Sasa executive director Trix Trikam said the figures and facts used by Asasi were inaccurate.
“Its distortion of the facts is worse than the distortion of the world price of sugar.”
He said Asasi was incorrect about a number of figures relating to market share of local sugar producers, the number of jobs the local industry provides, and import figures.
He said it was using figures from two years ago.
“Research has shown that South African retail prices of sugar are among the lowest in the world.”
However, Asasi warned: “If [the import tariff is] permitted this would further protect one of the most sheltered sugar industries in the world, eliminate competition in the market, and lead to a complete monopoly of the domestic market.”
A similar battle in the poultry sector recently culminated in import tariffs for “whole bird” going up 82 percent, the maximum allowed, while other cuts had increases of up to 14 percentage points.
Reports are that negotiations almost resulted in frosty relations with Brazil, a Brics partner that accounts for 50 percent of South Africa’s chicken imports.