Canegrowers call for end to sugar tax as import volumes rise

IN a media statement issued last week, SA Canegrowers called on the government to urgently scrap the sugar tax in light of a surge in imported sugar that is increasingly displacing locally produced sugar and threatening the survival of the South African sugar industry. 

The local sugar industry supports more than one million livelihoods, directly and indirectly, across KwaZulu-Natal and Mpumalanga. The 27,000 small-scale and 1,100 large-scale sugarcane growers form the backbone of this value chain, yet for the past year they have been at unprecedented pressure due to the combined effects of rising input costs and volatile global markets, the sugar tax is only serving to compound pressure on a sector already in severe distress, according to SA Canegrowers.

SA Canegrowers is urging government, industry partners and consumers to stand together to protect a sector that underpins many rural economies.

“Imported sugar is often heavily subsidised in exporting countries, but the only people who benefit are the agents who import the sugar into South Africa and are often able to reap high short-term profits by selling the sugar at local market prices,” said Higgins Mdluli, chairman of SA Canegrowers.

SA Canegrowers’ analysis of figures released by SARS reveals that 153,344 tons of heavily subsidised imported sugar entered South Africa between January and September 2025. As a comparison, over the same period in 2020 South Africa imported just 20,924 tons, whilst the previous highest level of imports was 2024 at 55,213 tons for the same period.  

The global sugar market is currently characterised by persistent oversupply and heavily distorted trade, with large exporting countries able to offload surplus sugar at artificially low prices due to subsidies, currency advantages and weak global demand growth. 

“In this environment, protecting South Africa’s domestic market is critical. Without effective safeguards, local growers are forced to compete against dumped imports while simultaneously facing policies that suppress local demand. Allowing imported sugar to displace locally produced sugar under these conditions undermines food security, erodes rural economies and places a strategic agricultural sector at long-term risk,” said Mdluli.

South Africa’s sugarcane growers produce more than enough sugar to meet local demand, so imported sugar displaces locally produced sugar from retail shelves and food and beverage manufacturers.

At the same time, SA Canegrowers says it remains concerned about the ongoing reliance on the sugar tax to punish local drinks manufacturers who include sugar in their drinks. While the industry fully supports efforts to address public health challenges, there is no evidence that the sugar tax has delivered any meaningful health outcomes, while it has inflicted significant economic damage on growers, millers and workers. According to SA Canegrowers, when the sugar tax was introduced in 2018, the industry shed more than 16,000 jobs in the first year alone.

“The sugar tax is an unproven policy experiment with very real consequences for rural jobs and investment,” said Mdluli. “Any future decisions must be informed by a balanced assessment of health data and a calorie-intake survey of South Africans, balanced with the impact on the economy and on the sustainability of local food production.”

SA Canegrowers is calling on the government to act decisively to ensure fair trade conditions, including the effective implementation of existing import protection measures, and to engage meaningfully with industry on policies that affect the sector’s long-term viability. It said a meaningful first step would be for Finance Minister Enoch Godongwana to scrap the sugar tax.

The Association says consumers also have a role to play by supporting locally produced sugar and recognising the broader social and economic value of the industry.

“Saving the sugar industry is not just about growers; it is about communities, jobs and South Africa’s ability to produce its own food,” SA Canegrowers said. “By standing together now, we can protect a strategic sector and secure a more sustainable future for generations to come.”