South African Sugar Association manages to localize demand for 280,000 t of sugar under Sugarcane Master Plan | Food Business Africa Magazine
SOUTH AFRICA – South African Sugar Association (SASA) has made progress in implementing the Sugarcane Master Plan, achieving 280,000 t of sugar demand locally out of the target of 300,000 by 2023.
The Sugarcane Master Plan has been a crucial intervention aimed at stabilizing the sugar industry and putting it on an upward growth trajectory.
The South African sugarcane industry produces about 18 million tonnes a year of sugarcane and two-million tonnes of refined sugar, much of which is exported to the Southern African Customs Union (SACU).
The industry contributes about 0.27% to the gross domestic product, with export earnings totaling about R3-billion a year.
The ambitious plan has sought to ensure that 95% of sugar is locally procured and that local demand doubles from 150 000 t to 300 000 t by 2023.
It also aims to restore local market offtake, implement strategic trade protection, retain jobs, and support small-scale growers.
SASA noted the industry managed to restore 170, 000 t of sugar demand in the local market, against a target of 150, 000 t in Year 1 of Phase 1 of the Master Plan. Phase 1 of the plan comes to an end in March after three years of being operationalized.
During the end of the period, Phase 1 will have missed the target of restoring the demand in the local market of 300,000 t by 20,000t.
The local market comprises the SACU countries of Botswana, Eswatini, Lesotho, Namibia, and South Africa.
In restoring 280,000 t of sugar demand, SASA explained that the floods in KwaZulu-Natal influenced it in April 2022, the civil unrest experienced in the province in July 2021, and the Ukraine war throughout 2022.
The impact on supply chains and input costs, as well as the impact of loadshedding in South Africa, also played a role.
In light of the missed target, discussions have commenced on whether Phase 1 needs to be extended or whether the industry should proceed with Phase 2.
According to SASA, this long-term process will take three to five years to be fruitful and therefore, it seeks to develop a long-term policy framework approach to sugar taxation that affords certainty and predictability in support of investment and planning.
The association recommends that the Health Promotion Levy, or sugar tax, neither be increased nor expanded to include other products for the next three years.
So far, SASA has spent R216-million on transformation initiatives for the 2022/23 season, including R44-million in grant funding for black sugarcane growers delivering less than 1 800 t and R51-million in funding for those growers delivering more than 1 800 t a year.
Just under R50-million in production input assistance for small-scale growers, R23-million in transport subsidies, and R17-million in rehabilitating scall-scale growers’ irrigation infrastructure have also been invested in the season.
To this end, SASA has set up ten dedicated task teams, some of which are investigating ways to improve the industry, including by looking into biofuels and what is needed to develop this industry.
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