Govt exemption boosts SA sugar as Tongaat mills outperform
Local producers are now able to directly negotiate with major companies.
Local sugar producers and major buyers like food and beverage companies can now legally negotiate sugar purchases together, a move hailed by the industry as a breakthrough for local supply and pricing stability.
The change follows a government gazette announcement on Friday, August 13, in which Trade, Industry and Competition minister Parks Tau approved new exemption regulations permitting consultations on the procurement of more than 90% of local sugar between growers, millers, retailers and food and beverage manufacturers without breaching the Competition Act.
The exemption, valid for five years, is expected to strengthen local sugar sales, protect jobs and reduce reliance on subsidised imports.
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“Such discussions include working towards commitments from local commercial users of sugar and retailers to use and stock mainly locally produced sugar,” said SA Canegrowers chairperson, Higgins Mdluli.
“The South African sugar industry is a national asset. We support local jobs and farming, yet our market is being flooded by cheap, subsidised imports.”
The South African Farmers Development Association executive chairman, Dr Siyabonga Madlala, praised the minister’s announcement.
“Since 2018, the South African sugar industry has faced numerous challenges. These have placed immense pressure on various components of the industry,” said Madlala.
“The gazette is a critical step towards stabilising the industry and ensuring its long-term sustainability.”
There was more good news. Tongaat Hulett’s three South African sugar mills are outperforming expectations at the halfway mark of the 2025 sugar season.
Since entering business rescue in 2022, Tongaat Hulett has invested R1.45-billion – secured by the Industrial Development Corporation – into rehabilitating its Maidstone, Felixton and Amatikulu mills, as well as its central refinery.
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Maidstone and Felixton have drastically reduced lost production time due to equipment failures, and Amatikulu is ahead of schedule.
“We are seeing strong, measurable improvements across our milling operations, thanks to consistent investment in infrastructure, skills and process optimisation,” said Tongaat Hulett CEO Gavin Dalgleish.
Sucrose extraction rates remain above 95% across all mills and value recovery percentage, a key industry metric, has exceeded 100% at all sites.
Ryan de Matteis, chairperson of the Amatikulu Mill Group Board, agreed.
“It’s been a very good season so far,” he said.
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