SA cane growers receive transformation intervention funding from South African Sugar Association

SOUTH AFRICA – South Africa’s cane growers have received timely financing from the South African Sugar Association as the industry struggles with the milling sector crisis and growers work to recover from last season’s financial shocks.

Industry organization SA Canegrowers has welcomed the disbursement of R60-million in transformation intervention funding to black and small-scale growers through the South African Sugar Association.

“In light of these challenges, the funding disbursed this month is vital to sustain growers in the interim. It will provide critical support in an environment marked by rising debt servicing costs and high input costs,” Chairperson Andrew Russell said.

This is especially important for small-scale growers, who face the greatest challenge in accessing operating and capital finance.”

The industry has budgeted R125m for black and small-scale growers delivering less than 1,800 tonnes of cane in the 2023/2024 season.

The R60m will be paid out at the end of July 2023, together with the payments for the cane delivered in June 2023. A further R50m will be paid out in November 2023, with the balance to be paid out in January 2024.

In addition, R51-million has been budgeted for black growers and joint ventures delivering more than 1 800 t of cane. These are predominantly land reform growers.

The decisions of the business rescue practitioners (BRPs) at the Tongaat Hulett and Gledhow sugar mills to default on financial obligations to the industry totaling R1.5-billion reduced the final recoverable value price of sugar for the season by more than R400/t.

This, in turn, had a hard hit on the small-scale growers, in particular. However, Russel indicated that the legal action brought in this regard is ongoing.

“While SA Canegrowers has welcomed this announcement, it remains to be seen what the final arrangements for Tongaat Hulett will be, and whether these can save the sugarcane operations that are vital to local economies on the North Coast of KwaZulu-Natal,” he explained.

The chairperson added that SA Canegrowers is committed to the survival of the industry and to supporting the industry’s most vulnerable small-scale and black growers.

He said the organization will continue to work with its industry partners through the South African Sugar Association to protect the one million livelihoods the industry supports.

The SA Canegrowers, who had been pressing their thumbs in hope for a suited bidder for ailing the Tongaat Hulett businesses, recently also welcomed the Tongaat’s announcement of the equity partner, describing it as “an important step forward”.

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