SA Canegrowers, representing South Africa’s 27,000 small-scale growers and 1,100 large-scale growers, has formally written to President Cyril Ramaphosa and to the Minister of Finance, the Minister of Trade, Industry and Competition, the Minister of Agriculture, and the Minister Public Works and Infrastructure, calling for urgent, coordinated intervention to help stabilise the South African sugar industry.
Considering the urgency and time-sensitive nature of the crisis, SA Canegrowers would like to thank Minister John Steenhuisen for his engagement with the industry over the past week. There is however, as of yet, no real solution in sight with the hearing date for the provisional liquidation of Tongaat Hulett for February 27, 2026.
Sugarcane growers and the broader sugar industry are not only significant current employers and drivers of rural economic activity, but can serve as a catalyst for new investment, job creation and long-term growth in emerging greenfields industries (such as biofuels) with the right, coordinated government policy framework.
But the sugar industry is currently confronted by a convergence of debilitating pressures: the potential liquidation of Tongaat Hulett Limited and the uncertainty surrounding its milling operations; the unprecedented surge in imported sugar; and the continued impact of the Health Promotion Levy.
Tongaat Hulett’s liquidation is not merely about the survival of a single corporate entity, but the systemic importance of the company’s milling operations to the broader South African sugar value chain and economy.
Tongaat Hulett’s mills are critical infrastructure. Of South Africa’s 28,000 large- and small-scale sugarcane growers, Tongaat Hulett is the only milling company available to 18,000 growers. There is no economically viable alternative milling option for these growers. If these Tongaat Hulett’s operations fail or enter unfunded liquidation without structured intervention, the consequences will not be contained within a balance sheet. The majority of South Africa’s growers will immediately lose market access, their estimated 40,000 directly employed workers will face unemployment, and the surrounding rural communities will immediately be vulnerable to economic and social unrest.
It however does not stop there. In the South African sugar industry, millers and growers share revenue of sugar sales through the Sugar Industry Agreement framework. An unfunded liquidation of Tongaat Hulett will mean that Tongaat Hulett’s levy payments will cease, requiring all growers and the remaining millers to make up the shortfall, as will the sale of Tongaat Hulett’s existing stock of refined sugar. All of South Africa’s sugarcane growers will be severely negatively affected by the liquidation, unless some form of agreement can be reached to keep the milling operations open.
Allowing Tongaat Hulett’s operational footprint to collapse would accelerate South Africa’s dependence on sugar imports, increasing long-term exposure to volatile global prices and exchange rate risk. Currently, global sugar prices and the exchange rate may favour importers, but the volatile nature of these markets means that South Africa would be exposed to an uncontrollable inflationary risk.
What may appear to be a contained corporate failure would, in reality, trigger dire cascading economic consequences across KwaZulu-Natal, Mpumalanga and the national food and beverage system.
“The cost of stabilising and preserving these operations is materially lower than the long-term social, fiscal and industrial cost of rebuilding a collapsed value chain — if rebuilding proves possible at all,” said Higgins Mdluli, chairman of SA Canegrowers.
“For this reason, Tongaat Hulett’s operational continuity has become a matter of systemic economic stability. Urgent, coordinated government intervention is required to prevent a failure whose consequences would extend far beyond a single company. We call on the president to coordinate a response to save rural jobs and livelihoods.”
SA Canegrowers is calling on urgent government action:
- DTIC and ITAC to review and amend the sugar import dollar-based reference price to bring it in line with global economic realities, as per the industry’s submission in 2025;
- DTIC and IDC to do all within their power to ensure that the Tongaat mills and refinery remain operational in the immediate future and beyond;
- Treasury to scrap the Health Promotion Levy, a tax that has cost the industry 16,000 jobs and R2 billion in revenue in 2018 alone, with no direct evidence of health impacts in the eight years since; and
- Recommitment to the outcomes of the Sugarcane Value Chain Master Plan 2030, including a commitment to local procurement of sugar, harmonising sugar supply within SADC, and a commitment to policies that would enable green industrialisation projects, including projects such as sustainable aviation fuels based on ethanol made from sugarcane.
ENDS
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