Local sugar sector is on track with its masterplan. Picture: Bongani Mbatha, ANA.
Local sugar sector is on track with its masterplan. Picture: Bongani Mbatha, ANA.

Sugar sector is on track with its five-year transformation plan

By Given Majola Time of article published May 14, 2021

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THE SUGAR sector is on track with its five-year transformation plan, with the government having spend hundreds of million rand to remedy the inequalities experienced by black sugar cane farmers.

Department of Trade, Industry and Competition deputy minister Nomalungelo Gina this week hailed the work done in the sugar industry.

Since the signing of the Sugar Value Chain Master Plan last year and the implementation of the plan, last year saw a rise in local production and a decline in important sugar, creating stability for an industry which employs some 85 000 workers

According to a recent publication in the South African Sugar Journal, Department of Trade, Industry and Competition Minister Ebrahim Patel said that a progress report on the implementation of the master plan has indicated a 15 percent growth in local sugar sales. The industry saw increases in purchases of sugar from both by the retail and industrial sectors, which included soft-drink manufacturers.

Gina told the Trade, Industry and Competition Portfolio Committee meeting held this week: “In this Phase 1 of the master plan, industrial users and retailers of sugar have committed to minimum levels of South African grown and produced sugar, equal to no less than 80 percent of need during the first year, and increasing to 95 percent by the third year. To support this undertaking, sugar producers have equally committed to price restraint during this period.

“Over the three-year Phase 1 period, the sugar industry will commence with a stabilisation and restructuring plan that will include among other things, development of diversified revenue sources for the industry, small-scale grower retention, support and transformation,” Gina said.

South African Sugar Association (Sasa) executive director Trix Trikam confirmed he industry had spent R400 million as part of its five-year Transformation Plan, whose implementation began in the 2019-20 season.

“Having spent R400m in two seasons demonstrates that the industry is well on track with regards to the five-year transformation plan. These interventions go a long way in ameliorating the plight of small-scale growers, who have had to face several serious challenges including sugar imports, insufficient tariff and the so-called sugar tax (HPL),” said Trikam.

Sasa said that the implementation of the five-year transformation plan was preceded by R172m Immediate Transformation Interventions.

Trikam said in total, the industry had spent R572m on transformation since September 2018. In addition, the total Supplementary Payment Fund payments to small-scale black growers for the past three seasons amount to more than R143m.

To ensure the success of the transformation plan, there was a designated committee composed of Sasa and its members, the SA Canegrowers Association, South African Farmers Development Association and Sugar Millers' Association, which discussed and decided how the funds were optimally utilised.

This week, SA Canegrowers announced a new partnership with Proudly South African to encourage consumers to buy local sugar. This partnership promised to give new impetus to the SA Canegrowers’ “Home Sweet Home” campaign started in December last year to educate and encourage consumers to support the local sugar industry by buying of locally produced sugar.

Over the past decade, the sugar industry has faced critical challenges including droughts and increasing production costs. One of the greatest threats has been the result of weak trade protections against increasing cheap sugar imports from deep-sea countries such as Brazil, and from the Southern African Customs Union. These cheap imports are said to have cost the local industry more than R2.2 billion during 2019 alone.

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