SA’s struggling sugar industry has moved to allay fears of shortages or price hikes after the devastating floods in KwaZulu-Natal that damaged canefields and farm infrastructure, with losses amounting to R223m so far.
KwaZulu-Natal — the heart of SA’s sugar industry, which generates income of about R14bn a year — directly employs about 85,000 workers and supports at least 350,000 jobs across the value chain.
“We are thankful that the Mpumalanga area as well as the Midlands have been less affected, as this will be able to supply sugarcane for sugar production,” Thomas Funke, the CEO of the SA Canegrowers Association, said in an interview with Business Day on Wednesday.
“We understand from our milling colleagues that the Gledhow mill at KwaDukuza was flooded and that they may have suffered flood-related damage which could take up to three weeks to resolve.
“It seems that most of the other mills on the north coast will start operating again soon.”
Funke said the industry also had sugar stocks from the previous season, which are being sold into the market, meaning that there is enough to meet demand. “We therefore do not foresee any shortage at this stage and thus no need to import,” Funke said.
Heavy rains and flooding have devastated KwaZulu-Natal, with the provincial government describing the disaster as “one of the darkest moments in the history” of the province.
More than 400 people have died and homes have been destroyed, as well as roads and other critical infrastructure, including power lines. Operations at the Durban port, one of Africa’s busiest, were interrupted as stacks of shipping containers collapsed, which is likely to lead to supply chain disruptions across Southern Africa. Exporters in SA are also on edge amid increasing cargo backlogs.
Funke said the sugar industry is hopeful that the crisis of the flood damage will be short term and will not affect the long-term viability of the sector. This is despite access roads and public infrastructure damage making it difficult for farmers to access mills, thus making production more expensive and difficult.
“Delayed repairs of this infrastructure will certainly put individual farming business and their jobs at risk,” Funke said.
The catastrophe comes just as many canegrowers had started recovering from the riots and arson attacks of July last year, which saw 554,000 tonnes of cane burnt and R84m in losses.
The industry has been on the brink of collapse in recent times. Headwinds include a drop in sales volumes — partly due to the sugar tax — as well as falling prices and stiff competition from cheap imports.
“It is clear that this latest tragedy could be the final death knell for hundreds of canegrowers and the rural livelihoods they support.
“In particular, small-scale growers are most at risk of not recovering from losses of this magnitude,” Funke said.
The association had requested urgent financial and infrastructure relief from the government to replant cane fields and sustain cash flow while farms were being rebuilt for production by the next harvest season.
A report produced by the association on the extent of the damaged includes a list of local roads and bridges that need to be prioritised for repairs so workers are able to access farms and growers are able to transport cane to mills, Funke said.
Fruit exporters said they were keeping a close eye on the port situation in KwaZulu-Natal amid fears that shipments could be derailed, which could compromise the quality of products destined for overseas markets.
“While the citrus export season will only be in full swing towards the end of this month, we must remain vigilant of any delays in addressing the damage caused by the flooding. That being said, the [industry] is engaging closely with government in this regard and is reassured by President Ramaphosa’s recent visit to the ports to assess the damage,” said Justin Chadwick, CEO of the Citrus Growers’ Association of SA.
SA is the second-largest global exporter of citrus fruit after Spain. The local citrus industry exports to more than 100 countries, generating about R20bn annually and supporting 120,000 jobs.
But exporters across all key sectors of the economy have been left frustrated, fearing huge losses after recent operational challenges including ageing, out-of-service infrastructure, and congestion at the ports in Cape Town, Durban and Richards Bay.
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