CAPE TOWN – Signs that import protection tariffs for the sugar industry might be phased out indicated a turnaround in government thinking on this issue, SA Sugar Importers Association chief executive Chris Engelbrecht said on Thursday.
The Portfolio Committee on Trade and Industry said it had heard that the protectionist strategy for the sugar industry needed to be phased out in favour of one based on competitiveness.
This followed engagements between the industry and the Minister of Trade and Industry, Ebrahim Patel, and Minister of Agriculture, Land Reform and Rural Development Thoko Didiza.
Stakeholders agreed to an export-led approach targeting the African market through the implementation of the African Continental Free Trade Agreement to support industry competitiveness.
This represents a refusal to agree to pleas from the local industry to tighten controls on sugar entering the South African market from other African countries.
The Department of Trade and Industry said the sugar industry needed to diversify its product offerings to include ethanol, using sugar cane for co-generation of electricity and bio-based plastic products, among other things.
The industry faces global and domestic challenges, such as a low global price, competition from sugar imports, high input costs and lower demand for sugar since the health promotion levy on sugar-sweetened beverages was introduced.
“Thus, the over-reliance on sugar production without investing in alternative products is unsustainable,” it said.
In 2018 the South African sugar industry said it was in crisis and requested and received an increase in the dollar base reference import price to R680 from R566 per ton.
Recently, local sugar producers have asked for this price to be increased to R856 per ton.