Media Statement by Higgins Mdluli, Chairman SA Canegrowers
July 9, 2025
US tariff and cheap sugar imports are a double blow for South African sugar industry
SA Canegrowers, representing 24,000 small-scale farmers and 1,200 large-scale growers, is deeply concerned about the 30% tariff on South African sugar exports to the United States, set to take effect on 1 August. This move, which could render our sugar uncompetitive in the US, also underscores the urgent need to protect the local industry from the ongoing threat of unfairly priced imports.
It is important to stress that the South African sugar industry poses no threat to the US market, which relies on sugar from outside the US to meet local demand. The US has up until recently had a quota system in place to ensure that the US retains full control over both the volume and price of imported sugar. The 30% tariff will make South African sugar less competitive in the US market when compared to heavily subsidised competitors like Brazil, India and Mexico.
Losing competitiveness in the US market comes at the same time that South African sugarcane growers are under pressure from cheap, subsidised imports flooding into our ports – from the same global competitors. The South African government is, however, in a position to help protect the local sugar market from unfair trade practices, an essential move as the industry supports a million livelihoods across the value chain.
The global sugar market is heavily distorted, with some countries providing extensive subsidies and incentives to their sugar producers. This keeps international prices artificially low and results in foreign sugar flooding the South African market at below the cost of local production.
South African sugarcane growers cannot compete with these unfairly subsidised imports arriving every day at our ports, particularly as the industry contends with a range of other pressures including erratic weather patterns, mill closures, the Health Promotion Levy (sugar tax) and the 30% tariffs that will reduce revenue from the US. For every ton of imported sugar that enters the local market, the industry loses R6000.
In 2023/24, 25,000 tons of sugar arrived from countries outside of the Southern African Customs Union (SACU). A year later, this had increased four-fold to over 100,000 tons of imported sugar outside SACU. South Africa is on track for an even high level of sugar imports for the 2025/26 season.
The South African government can help the local sugar industry by ensuring that our own import tariff regime is up to date with the realities of the markets.
Subsidised sugar from foreign markets also does not necessarily lead to cheaper sugar for local consumers, as importers use the price differential to increase their profits by selling at local prices. The result is, however, that locally grown sugar is displaced, and thousands of jobs are put at risk. Consumers who unwittingly buy foreign sugar fund growers in other countries, whilst local growers struggle.
South African growers cannot afford to become uncompetitive in a very important export market due to punitive tariffs whilst at the same time losing local market share due to unfair trade practices.
It is imperative that the government acts with urgency to protect the local industry against unfair trade practices to level the playing field, ensure fair pricing, and protect precious jobs in an already struggling economy.
ENDS
For media enquiries:
Gerhard Mulder
gerhard@resolvecommunications.co.za
083 305 9361