DURBAN - Providing relief for the struggling local sugar industry, Trade and Industry Minister Rob Davies has endorsed the International Trade Administration Commission (Itac) recommendation for an increase of import duties on sugar to $680 (R9 847) a ton.
This followed an application launched by the SA Sugar Association (Sasa) to Itac in February for an increase of dollar-based duty from $566 a ton to $856 a ton and intensive investigation by Itac.
The Department of Trade and Industry spokesperson, Sidwell Medupe, said on Wednesday that while the level was not at the maximum bound rate as initially requested by the industry in the application, the $680 a ton would provide the immediate relief urgently required by the industry and sufficient trade protection against the surge of imports.
"The tariff forms part of a set of measures considered by government, in collaboration with the industry in order to improve the sustainability of the industry and future growth prospects,” said Medupe.
Sasa said imported sugar had overtaken the local sugar industry by about 25 percent of the total market leading to a R2.3 billion decline on South Africa’s sugar revenue in the past season from April 2017 to March 2018.
The SA Farmers Development Association said it remained committed to ensuring that black small-scale and emerging farmers had a fighting chance to ensure their sustainability.
“We supported Sasa's submission to increase the Dollar Based Reference Price (DBRP) from $566 to $866. The gazetted DBRP earlier in the month was $680. We believe that half a loaf is better than nothing,” said Naidu.
Naidu said while the increased tariff might have an effect in dissuading the sugar imports, black small-scale and emerging farmers required holistic solutions to improve their financial situation.
“The DBRP is just one of the variables that assist in ensuring sustainability of black small-scale and emerging farmers. In the deep rural areas of KwaZulu-Natal and Mpumalanga, where sugar cane is sometimes the only option to provide income for rural households, there are a number of additional factors that include marginal soils, lack of capital for replant and fertiliser, high prices for logistics. We hope that the renewed government focus on agrarian reform will attract more farmers and revive South Africa’s rural communities and economies.”
South African Sugar Association executive director Trix Trikam said the organisation was assessing the Itac Report, which outlined the commission’s decision to increase the DBRP for sugar from $566 to $680 a ton. “The reference price granted by Itac is significantly lower than the level of $856 requested by the sugar industry.”
Sasa said while they were not in a position to offer a detailed comment on the matter currently. It would follow after discussion on areas already identified with Itac to follow once fully deliberated on and the report studied.