The South African Sugar Association (Sasa) has warned that the delay in gazetting the trigger and the lower prices was heightening the risk of deep-sea imports entering and affecting the Sugar Master Plan’s objectives to maintain “buy local” campaigns.
This comes after the International Trade Administration Commission of South Africa (ITAC) earlier this month published a gazette on the reduction of customs duties on sugar from 140.91c/kg to 109.36c/kg.
Trix Trikam, the executive director at Sasa, told Business Report on Monday that a more efficient progress to ensure speedy processing of triggers and gazetting of duties was needed.
“The lower duty of 109.36c/kg was triggered in April 2024 when prices were higher. However, world prices of sugar have subsequently declined, and a higher duty has triggered,” he said.
Trikam said the reduction in the duty was a result of the variable tariff formula set by the ITAC.
“The current dollar-based reference price (DBRP) is $680 per ton, which was set in 2018. The custom duty is effectively the difference between the world prices and the reference price of $680,” he said.
“When the world prices of sugar decline, the duty increases. On the contrary, if world prices increase, the duty declines. The duty changes as world sugar prices change.”
Dr Siyabonga Madlala, executive chairperson of at the South African Farmers Development Association (Safda), concurred that the reduction of input duties on sugar from 140.91c/kg to 109.36c/kg would place the sugar industry at risk in terms of higher deep-sea sugar imports entering the country.
“Any increase of sugar imports will reduce local markets sugar sales, resulting in the sugar industry having to export more tonnages of sugar at a loss,” Madlala said.
“This will further impact negatively on the aspirations of the Sugar Master Plan which seeks to ensure stability, growth, and long-term sustainability for the sugar industry.”