Double blow for critical South African industry

South Africa’s sugarcane industry faces a double blow from the combination of US President Donald Trump’s proposed 30% tariff on the country’s goods and cheap sugar imports.

This comes after the US President made his long-awaited announcement regarding the tariffs he plans to impose on imports to the United States following his ‘Liberation Day’ speech earlier this year.

On 7 July 2025, Trump informed South African President Cyril Ramaphosa that, from 1 August 2025, a 30% tariff would apply to all South African products imported into the United States. 

While Ramaphosa has reassured South Africans that the Trump administration may lower the planned 30% tariff on goods, this has not yet been confirmed.

SA Canegrowers, which represents 24,000 small-scale farmers and 1,200 large-scale growers, said it is deeply concerned about the impact this tariff will have on the country’s sugarcane industry.

These tariffs come at a time when the sector is already under significant pressure, primarily due to the influx of cheap sugar imports into South Africa, which is making locally grown sugar less competitive.

Unlike South Africa, countries like Brazil, India and Mexico heavily subsidise and incentivise their sugar producers. This makes their products more attractive to importers worldwide, including South Africa and the US.

SA Canegrowers chairman Higgins Mdluli explained that this results in the global sugar market becoming heavily distorted, as it keeps international prices artificially low.

This leads to foreign sugar flooding the South African market at below the cost of local production, leaving local producers unable to compete.

Mdluli estimates that, for every ton of imported sugar that enters the South African market, the local sugar industry loses R6,000.

In 2023/24, 25,000 tons of sugar were imported from countries outside the Southern African Customs Union (SACU). A year later, this had increased fourfold to over 100,000 tons of imported sugar outside SACU. 

Mdluli said South Africa is on track for an even higher level of sugar imports for the 2025/26 season. 

Local sugar producers under pressure

Mdluli believes that the upcoming 30% tariff on South African goods imported into the United States could further distort the market and worsen the competitiveness of South African sugar producers.

“It is important to stress that the South African sugar industry poses no threat to the US market, which relies on sugar from outside the US to meet local demand,” he explained.

“The US has, up until recently, had a quota system in place to ensure that the US retains full control over both the volume and price of imported sugar.”

Mdluli said South African growers cannot afford to become uncompetitive in a very important export market due to punitive tariffs, whilst at the same time losing local market share due to unfair trade practices.

He added that the government is in a position to help local producers and protect them from unfair trade practices.

“The government must act with urgency to protect the local industry against unfair trade practices to level the playing field, ensure fair pricing, and protect precious jobs in an already struggling economy,” he said.

The government has taken steps to address the challenges faced by local sugar producers, including the development of the Sugarcane Value Chain Master Plan 2030.

President Cyril Ramaphosa announced in his 2019 State of the Nation Address that the government will develop several Sector Master Plans to help create conducive conditions for industries to grow.

The Sugarcane Master Plan, in particular, aims to pave the way forward for South Africa’s sugarcane industry, ensuring its sustainability and profitability.

The Master Plan describes South Africa’s sugarcane industry as “in crisis”, and one of its main ambitions is to prevent the sector’s collapse.

The document explains that annual sugar production in South Africa has declined by nearly 25%, from 2.75 million to 2.1 million tonnes per annum, over the past 20 years. 

The number of sugarcane farmers has declined by 60% during this period, and sugar industry-related jobs are estimated to have decreased by 45%.

Food for Mzansi reported in February 2025 that the local sugar industry has made significant progress under the Sugarcane Master Plan. However, the sector remains fragile, and its sustainability remains uncertain.