SOUTH AFRICA – SA Canegrowers is urging the National Treasury to prioritize measures that aid economic recovery and job retention, while simultaneously opposing any increase in the Health Promotion Levy, commonly known as the sugar tax. 

Chairperson of SA Canegrowers, Andrew Russell, stated in a recent release that raising the health promotion levy would be destructive and unjustifiable.  

The organization is calling for careful consideration of the economic context, emphasizing the vulnerability of livelihoods dependent on the sugar industry amid challenging economic conditions. 

Russell highlighted the challenges faced by the sugar industry, including load shedding, high input cost inflation, natural disasters, and deteriorating logistics infrastructure. These issues parallel those faced by other sectors of the economy. 

Over the past six years, SA Canegrowers has been monitoring the impact of the Health Promotion Levy closely.  

Independent research and modelling by the Bureau for Food and Agricultural Policy (BFAP) indicate that an increase or expansion of the sugar tax could cost the industry thousands of jobs and jeopardize businesses of nearly 3,000 small-scale growers. 

The implications extend beyond the immediate economic impact on growers. Russell noted, “The brunt of these pressures is felt by small-scale local growers who are the first to close up shop as costs spiral out of control.  

But the implications also extend to the one million South Africans who rely on the industry as millers, large-scale growers, and other industry stakeholders struggle with the same issues.” 

Meanwhile, the South African Sugar Association (SASA) acknowledged challenges in the country’s economic growth outlook, citing inadequate electricity supply, freight rail capacity, and a weaker global outlook.  

Trix Trikam, the executive director of SASA, highlighted the impact of a widening budget deficit and increasing debt service costs on the economy. 

The sugar sector, a significant source of livelihood for 2 percent of the South African population, faces challenges in the weak economy. Trikam noted that while global sugar prices have remained elevated, local manufacturing and consumers are under pressure. 

Despite the challenges, SASA expects a fairly good year but anticipates potential impacts from climate change and load shedding on the industry.  

The cane-growing sector comprises 23,000 registered sugar cane growers, producing an estimated average of 2.2 million tons of sugar per season, with a significant portion exported to various markets. 

 

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