Parliament’s trade and industry committee has called on trade and industry minister Rob Davies and other cabinet ministers to immediately intervene in whatever way possible to address the crisis in the sugar industry.
The industry has been hit with cheap imports and the health promotion levy (sugary beverages tax), which has lowered the volume of sugar used by soft drink manufacturers. It has also been affected by a severe drought in KwaZulu-Natal over the past three years, which has cost the industry an estimated R2bn.
The committee agreed to call for a ministerial intervention during a meeting on Tuesday, rejecting a counter proposal by DA trade and industry spokesperson Dean Macpherson that a joint meeting be held with the departments of agriculture and rural development to address the crisis. ANC MPs said there was no slot available on the committee’s busy agenda to include such a meeting ahead of the closing down of parliament on March 20 to prepare for the elections on May 8.
The DA has submitted a request to the National Assembly speaker Baleka Mbete requesting an urgent debate of national importance on the sugar crisis.
“To turn this ship around, parliament must immediately place a moratorium on the sugar tax; must ensure adequate tariff and industry protections; and must ensure that illegal imports are curtailed,” DA chief whip John Steenhuisen said in a statement.
“When the sugar tax was first mooted, industry experts warned that this would lead to job losses. So far, 1000 jobs have already been lost in the sector and this figure is steadily climbing.
“This tax, combined with 500,000 tons of sugar illegally dumped in the country in 2018; the R220m missing drought relief funding; and inadequate tariff protections of $680 per ton rate versus the $856 per ton, which the industry applied for, have combined to create the perfect storm for a jobs blood bath in the industry.”
Trade and industry director-general Lionel October agreed at the committee meeting that the industry was in a crisis. He said the three-year drought in KwaZulu-Natal had cost the industry R2bn and acknowledged that there had been very little support for the industry due to the disappearance of drought relief funds in the provincial government.
October said there had been a surge of imports of 500,000 tons into the industry. There was a global oversupply of sugar, which had depressed the international sugar price and resulted in dumping on the local market.
He stressed that the department had supported the tariff application made by the SA Sugar Association (Sasa) but the International Trade Administration Commission had arrived at its own decision after also taking into account opposing arguments from retailers, downstream producers and consumers who wanted lower prices.
October also agreed that the tax on sugary beverages — which collected R2.3bn in the 2018/2019 fiscal year — had had a negative impact on the sugar industry. “It is not good for our industrialisation and transformation agenda,” he said.
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