New rules will help embattled sugar industry but don't address import crisis - SAFDA

Government is taking steps to strengthen South Africa's embattled sugar industry.

Parks Tau, Minister of Trade, Industry and Competition, on Friday gazetted reforms which the South African Farmers Development Association (SAFDA) hailed as a breakthrough for the sector.

The move comes as Tongaat Hulett's business rescue practitioners apply to the high court in Durban to place the company under provisional liquidation.

The South African Sugar Association (SASA) warned in December that an escalating import crisis posed “a serious threat” to the industry’s competitiveness, while the country in fact produces surplus sugar.

SAFDA chairperson Siyabonga Madlala, made the following statement:

"Without urgent intervention to restore adequate protection and reinforce local market demand, the continued influx of imports could inflict irreversible damage on one of South Africa’s strategic and labour-intensive, agro-industries."

In conversation with Stephen Grootes, Madlala clarifies that the new rules do not affect imports, but South Africa's sugar exports.

"The regulations are actually helping the industry manage its own exports. They assist us with our carry-over tonnages, meaning that when we produce sugar that means we can't sell in the season, we can store it but be able to pay our farmers and carry it over to the next season."

Madlala says the sugar industry has applied for a review of import tariffs to protect local growers and, of course, jobs.

"The sugar imports we're talking about are still ravaging us... and by buying imported sugar we are actually exporting jobs."

The SAFDA chair describes the import market as basically a dumping market, highlighting the preferential conditions sugar producers in other countries enjoy.

"Most of the industries in the other countries are subsidised by their governments... and they are also not subject to minimum wage as we are.".

For more detail, listen to the interview audio at the top of the article