South Africa’s sugar industry is facing a perfect storm. As locally grown sugar is facing punitive tariffs in the US, cheap foreign sugar is flooding into South Africa. This is bad news for both local growers and local consumers: imported sugar only inflates the profits of importers, who sell the cheap imported sugar at parity with local stock, meaning there is no price benefit to local consumers.
But the imported sugar displaces sugar grown by South Africans from our own market at the same time as we stand to benefit far less from exports to the US. This unfair trade environment is threatening jobs and the one million livelihoods dependent on the sugar industry.
Local sugarcane growers produce enough sugar to serve the needs of all local consumers – both retail and commercial – with extra sugar left over to export to overseas territories.
South Africa exports sugar to the US every year in what has up to now been a tightly controlled import agreement with the US. The United States’ recent decision to impose a 30% tariff on all South African exports has therefore rightly sounded alarm bells, as it throws the existing trade agreement out the window.
For years, the US has operated a sugar import quota system that allowed South African sugar access to its market. Although sugarcane is grown in the US, their domestic growers do not produce enough to service the demand of their local economy. The US quota system controlled the volume and price of sugar entering their market. It was never a floodgate; and the imports were strictly controlled to complement US domestic production. Even so, the US is a premium destination for South African growers, offering a fair price for our sugar and helping sustain jobs back home.
Potentially losing competitiveness in the US market comes at the same time as imported sugar is flooding into our own market. South Africa urgently needs an updated and fair import tax regime to ensure fair competition.
The current out-of-date tariff structure has meant that South Africa has allowed an immense increase in imported sugar from countries that significantly subsidise their sugar industries. In 2024, imports more than doubled compared to the previous year, and early signs point to yet another surge in 2025. These imports are often priced artificially low, made possible by state subsidies abroad.
For an industry already grappling with rising input costs, climate shocks, and regulatory burdens like the Health Promotion Levy (or sugar tax), imported sugar displacing our own production is a direct threat to the livelihoods of growers and the workers they support in rural KwaZulu-Natal and Mpumalanga.
Real jobs are on the line. For the 24,000 small-scale, 1,200 large-scale growers and the 1 million livelihoods in rural KwaZulu-Natal and Mpumalanga this is not an abstract policy issue. It is a question of survival.
So, what can be done?
The 30% tariff on South African produce unfairly undercuts South Africa’s competitiveness. The US Sugar Tariff-Rate Quota System worked and was to the benefit of both the US market and South African sugar growers. We need a pause in the current punitive tariff rate and work towards reviving this important trade policy.
Similarly, we should relook at our own trade policies.
South Africa has a tariff system in place for imported sugar, but the underlying mechanism has been left unchanged since 2018.
In the seven years since, global markets and realities have shifted significantly. The world has experienced a significant rise in input costs since 2021, for example, making agricultural inputs more expensive. The cost of electricity, fuel and fertiliser have largely risen, eating into the margins of sugarcane growers in areas under irrigation. Two local mills have closed permanently, meaning growers in certain areas have to transport their sugarcane further to get processed.
Not to mention that 2018 was also the year that the sugar tax was introduced. This tax alone caused the industry to shed 16,000 jobs in the first year of the tax alone, and dramatically cut the industry’s income, according to independent studies.
South Africa’s sugar industry is not subsidised like our competitors. If our own import tariff mechanism does not address this issue and increase duties on imported sugar, it leaves our growers vulnerable to unfair competition. This allows cheap sugar to flood our local shores, displacing locally produced sugar.
The local industry is facing a double blow. The industry has been central to rural development and the economic sustainability of countless rural communities in KwaZulu-Natal and Mpumalanga. We cannot afford to let this progress unravel. But we can still protect our industry by acting decisively on domestic trade policy. The solution is on the table. What we need now is urgency.
We appreciate that the Department of Trade, Industry and Competition and the International Trade Administration Commission of South Africa (ITAC) are currently working on this matter. But at the current timeline, the review will only be finalised in early 2026, this could be too late.