The Sugar Story – Import tariff could protect local market

Without a tariff on imported sugar up to 40 000 jobs could be lost to the South African sugar industry.
The local sugar industry is under immense pressure, apparently losing R50 million a month to sugar imports.
This is according to the South African Sugar Association (SASA), which has been pushing for the tariff since April last year in a bid to protect the local market from the rising tide of imported sugar.
In 2005 SA was importing just less than 12,5% of the sugar that is being imported today.
According to an article by Aubrey Gabriel published in The Cane Grower, newsletter of the South African Cane Growers Association, the amount of imported sugar has recently reached a level equivalent to the annual production of three sugar mills.
The issue here is that the price of sugar on the global market, represented by a dollar-based reference price is, according to the association, lower than the cost of local production.
As a result the SA industry is undercut and cannot sell its product locally.
It is then left with excess sugar produce, which it is forced to dump on the world market at a massive loss.
The tariff would inevitably see a rise in production costs for the food, beverage and confectionery industries, which could translate to higher costs for consumers buying these products.
While the tariff would also hurt the pockets of companies currently buying sugar off the global market, pushing up the price by 44%, SASA say its non-negotiable if the local sugar industry is to survive.
An urgent petition from the Association of Southern African Sugar Importers (ASASI) to obtain an interdict to stop The International Trade Administration Commission (ITAC)’s investigation into SASA’s application was struck off the roll by the North Gauteng High Court in November last year.
ITAC’s investigation into the idea of the tariff is in its final stage and its outcome is expected soon.