Press statement by SA Canegrowers
19 October 2026
SA Canegrowers, which represents 27,000 small-scale and 1,250 large-scale sugarcane growers in KwaZulu-Natal and Mpumalanga, is calling on Finance Minister Enoch Godongwana to use this week’s Medium-Term Budget Policy Statement to scrap the job-killing Health Promotion Levy, commonly known as the sugar tax. The sugar tax has compounded the pressure on growers who have had to endure two devastating years of heavily subsidised imports from Brazil, Thailand, India and Eswatini which have displaced locally produced sugar, as well as this year’s near-collapse of Tongaat Hulett.
Treasury has in the past recognised the negative impact of the sugar tax has placed on the industry. In the 2025 Budget, it cancelled a planned inflation-linked increase “to allow the sugar industry more time to restructure in response to regional competition.”
The reality is that the pressure on the industry has only grown.
For two years, weak tariff enforcement and an outdated tariff reference price meant that sugar from countries like Brazil, Thailand and India flooded South Africa at levels never before seen. Although the tariff reference price was finally adjusted in August this year, foreign sugar, often produced their own governments subsidising their production, displaced locally grown sugar.
Similarly, sugar produced in Eswatini is increasingly finding its way onto South African shelves, sometimes confusingly labelled to obscure the country of origin. Eswatini and South Africa are in a free-trade zone, and the new tariff regime does not put Eswatini sugar on an equal footing with locally produced sugar.
This year has also seen the near-liquidation of Tongaat Hulett, which serves 18,000 of the 28,000 sugarcane growers in the country. The Department of Trade, Industry and Competition, and the Industrial Development Corporation (IDC) stepped in to assist, and their actions ensured that the business rescue process will hopefully be able to conclude soon, without the company going into liquidation.
“Government has shown this year that it understands what is at stake for South African growers and for the rural economies they help sustain,” said Higgins Mdluli, Chairman of SA Canegrowers. “Increasing tariffs on sugar entering our ports and ensuring Tongaat Hulett did not liquidate were welcome steps in the right direction. But the sugar tax continues to work against us. We’re now seeing that the DTIC is working hard to ensure a sustainable sugar industry, while the HPL undermines this effort and levels of support.”
When the sugar tax was introduced in 2018, its impact on the industry was immediate. According to a NEDLAC-commissioned study, it cost the industry more than 16,000 jobs in its first year and contributed to the closure of two sugar mills in KwaZulu-Natal. Modelling by the Bureau for Food and Agricultural Policy has shown that, if the levy remains in place, the area under sugarcane will continue to shrink, with small-scale growers hit hardest. Eight years on, there is no evidence that the levy has had any impact on health outcomes.
Removing the levy is one of the few measures available to government that would ensure local sugar sales can recover after two devastating years. It would also give growers some breathing room as the industry works with government to build new markets for sugarcane in bioethanol and sustainable aviation fuel.
ENDS
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Gerhard Mulder
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Victoria Tompkins
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