South Africa : R1.5bn lost to cheap sugar imports
South Africa’s sugar industry is urging stronger protection against rising cheap sugar imports, which caused an estimated R1.5 billion loss. Following the IDC-Vision Sugar deal securing Tongaat Hulett, stakeholders seek tariff reforms, trade safeguards, and support for long-term sector sustainability.
While the sweet deal sealed between the Industrial Development Corporation (IDC) and the Vision Sugar Group has saved Tongaat Hulett Limited (THL) and cushioned thousands of jobs in the sugar sector, the call now is for the government to move with speed to protect the sugar industry from imports.
For years, labour formations and various organisations representing role players in the sugar cane sector have warned that cheap sugar imports, mainly from India, Guatemala, Brazil and Thailand, are killing the struggling industry.
The woes are exacerbated by sugar tax, known as the Health Promotion Levy implemented in 2018.
The key players in the industry have proposed safeguards against cheap deep-sea imports which is before the International Trade Administration Commission. Itac is also working on finalising its investigation on the need to adjust the dollar-based reference price for sugar.
The SA Canegrowers Association, representing the interest of cane growers, raised the alarm on the spiraling sugar imports flooding the market. The organisation says the status quo places the sugar industry in a precarious position.
“Imports of sugar accelerated sharply last year, with almost 200 000 tons of imported refined sugar entering the country over the course of 2025 due to a low global sugar price, stronger rand/dollar exchange rate and weak tariff protections,” the association said.
“Early data from 2026 indicates that imports are still rising and adjustments to the import tariff have had no effect, further undermining the stability of the local industry.”
South African Revenue Service data paints a grim picture: South Africa recorded 24 600 tons of deep-sea sugar imports in January 2026. The figure is more than imports for the entire 2020, 2021 and 2022 combined.
Higgins Mdluli, the SA Canegrowers chairperson, blamed the surge in cheap sugar imports on opportunistic agents taking advantage of a low global sugar price and weak local tariffs.
“They sell this sugar locally at similar prices to locally produced sugar. The profits go to the import agents and result in no savings to consumers in South Africa. This, in turn, means that jobs are being exported at the expense of the SA sugar industry. This surge of imported refined sugar is displacing locally grown and produced sugar from the South African market,” Mdluli said.
As a result of the cheap sugar imports, the sugar sector is estimated to have lost about R1.5bn.
On the other hand, Cosatu in KZN also cautioned against the crippling impact cheap sugar imports have on jobs and the economy.
“For now, what is important is that we do appreciate the development we see taking place. When Cosatu took the position of Tongaat Hulett, we were clear that our first and foremost issue, which was our primary demand, was to make sure that the jobs were safe … and the livelihoods of small-scale farmers and everybody else benefitting in the sugar value chain,” Cosatu KZN secretary Edwin Mkhize said .
He said Cosatu was also calling for greater accountability from the culprits who had defrauded Tongaat Hulett and almost led to its collapse.
“Over and above that, Tongaat Hulett must also be protected from cheap sugar imports which affects the industry and directly has a negative impact on job security,” he said.
The sugar industry forms the backbone of the rural economy in KwaZulu-Natal and the Mpumalanga lowveld region. The sugar belt in both provinces generates more than R25bn annual revenue to the country’s economy. KZN is the highest contributor, at R18.8bn. Mpumalanga contributes about R6bn.
Mzwandile Masina, the chairperson of the portfolio committee on trade and industry, said that while sugar sales had recorded some green shoots, more needed to be done to protect the sugar industry.
He cited the Sugar Value Chain Master Plan as a viable instrument to achieving the plan.
“The industry still faces challenges such as the pressures from cheap sugar imports, funding uncertainty to enable the implementation of the master plan. This includes the finalisation of pricing and trade protection measures,” he said.
The first phase of the Sugar Value Master Plan saw local sugar sales increase from 1.25 million tons to
1.55 million tons and the proportion of local purchases by the downstream users increase to 98% of sugar sold which resulted in the growth of the market.
Kaamil Alli, the spokesperson for the ministry of trade, industry and competition, said progress had been made in protecting the sugar industry.
“The department has been working very closely with industry. Through Minister [Parks] Tau and Deputy Minister [Zuko] Godlimpi, we have engaged in a process of review of the master plan.
“There have been a number of proposals that have been submitted and the DTIC continues to pursue various remedies including trade remedies,” Alli told the Mail & Guardian.
He said the department was aggressively easing bottlenecks in the sugar cane sector.
“We will take a decision that ensures we protect the industry while maintaining our obligation in the multilateral trading system. We are also intervening to ensure that our development finance institutions play a role in promoting industrialisation in the agri and agricultural-processing sectors,” he said.
The newly signed deal between the IDC and Vision Sugar Group’s key partners forms part of broad-based black economic empowerment and is compliant with both South African and Zimbabwean transformation policies.
Under the new arrangement, Robert Gumede’s Guma Group and the IDC own 68% of Tongaat’s South African operations, while Rute Moyo controls 64% of the Zimbabwean business. The remaining 40% stake in each country is held by Vision Group partners, including the IDC and Guma.
The Mozambican government holds a 15% stake of Tongaat Hulett Mozambique.
The arrangement means the IDC has interests in Zimbabwe, South Africa, Mozambique and Botswana.
Gumede and Moyo first got involved in a process to acquire THL Zimbabwe and Botswana in 2019, in a deal worth $164m, which was accepted by THL board but had to be cancelled when Zimbabwean businessman Simon Rudland made an offer and underwrote a R4bn rights offer which collapsed after the JSE panel discovered collusion.
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Source : Mail & Guardian
