R920m bitter pill for KZN canegrowers

Tongaat hulet. Will South Africa have to import sugar in the next season given that two of the country's sugar companies are experiencing disruptions in the mills due to the current drought in KwaZulu-Natal.Photo Supplied

Tongaat hulet. Will South Africa have to import sugar in the next season given that two of the country's sugar companies are experiencing disruptions in the mills due to the current drought in KwaZulu-Natal.Photo Supplied

Published Feb 5, 2015

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Nompumelelo Magwaza

THE KWAZULU-NATAL sugar sector stands to lose about R920 million due to the drought gripping the province.

Canegrowers Research Department analysis showed that production losses were estimated to be R574m, rehabilitation costs R274m and a potential loss of earnings for workers at R72m, according to David Wayne, the executive director at SA Canegrowers Association.

The association has requested about R250m from the provincial government to plug the losses.

However, the request was not been granted by the provincial disaster management centre saying it was difficult to determine the actual costs of damages caused by the drought.

“It would thus be recommended that the concerned sector quantifies it (losses) and be given a chance to resubmit their relief costs estimated based on what they envisage doing to mitigate the severity of the drought situation,” said the Department of Co-operative Governance and Traditional Affairs in KwaZulu-Natal.

SA Canegrowers said in a statement this week that due to the lack of rainfall since the beginning of summer 2013 followed by a dry 2014 spring, a serious threat was posed to the viability of some growers.

Some cane-growing regions in areas such as Empangeni in northern KwaZulu-Natal reported a 40 percent year-on-year crop reduction.

Wayne said that this was not an industry-wide drought and that three northern irrigated areas had not been adversely affected.

“Many growers are already in a stretched financial position due to ongoing increasing input costs and a protracted period of low returns to sugar-cane production. Those growers will be facing the 2015/16 season with limited means to implement proper crop management,” Wayne added.

Suresh Naidoo, the chairman of SA Canegrowers’ Association, said despite the drought, the sugar industry would be able to meet local market demand for the 2015/16 season.

The association, which represents 23 866 canegrowers, said the recent rains would have little impact on the current season’s crop with most of the mills in the province scheduled to close in six weeks time.

Two major sugar producers, Illovo and Tongaat Hullett, have already indicated that they would either shut down some of their mills or postpone mill start-up dates.

As a result of the drought, Illovo has decided not to open its Umzimkulu mill in the 2015 milling season and Tongaat Hulett has postponed its start-up date at its Darnall mill from April to July or August this year.

Sugarcane availability estimates for the December 2014/15 season were 17.7 million tons equivalent to 2.1 million tons of sugar, down from 20.03 million tons of cane equivalent to 2.3 million tons of sugar for the 2013/14 season.

According to SA Sugar Association, the sugar industry produces an average of 2.2 million tons of sugar a season. South African annual sugar consumption is about 1.5 million tons.

Trix Trikam, the executive director of the South African Sugar Association, said: “The sugar industry experienced drought during the past season which impacted negatively on production. The South African sugar industry will first satisfy the domestic market and there is no perceived need for imported sugar.”

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