Nkosinathi Msweli’s sugar cane farm in rural KwaDukuza, KwaZulu-Natal, has for three decades been a solid, albeit small, economic success story, employing eight full-time staff and 30 seasonal workers.
But cheap sugar imports were already eating into his earnings when US President Donald Trump announced a steep tariff on SA imports, creating what Msweli called a “double whammy” that leaves him facing tough choices.
“All in all, I will have to cut about 20 workers from this current season,” he said, as he watched his labourers chop cane from soot-blanketed fields. “The person that is here in the field maybe has 10 lives that he’s supporting.”
SA’s sugar industry, valued at about R25bn, directly and indirectly supports more than 300,000 jobs.
SA’s 26,000 small farmers, who work alongside 1,100 large-scale growers, are predominantly black.
A combination of market factors and politics, however, is exposing the sector to growing headwinds.
SA farmers are struggling to compete with cheap imports, including from Eswatini, which benefits from preferential access under a regional customs treaty. Depressed global prices resulting from large harvests in major producers like India and Brazil have, meanwhile, added to the pain.
And Trump’s 30% tariff on imports from SA is set to deal a blow to exports.
SA had previously benefited from a duty-free quota for 24,000 metric tonnes of sugar exports to the US market under the African Growth and Opportunities Act (Agoa).
While accounting for a relatively small 5% of total sugar exports, the SA Cane Growers’ Association said the US had served as a premium market that offered high prices, helping to sustain domestic jobs.
The scale of potential job losses remains unclear. But the industry association is urging the government to secure a trade deal with Washington that would safeguard exports to the US.
“If we don’t have good trade relationships with the US, it’s going to be detrimental, not just to our sector, but to many others as well,” said Pratish Sharma, a member of the association’s board.
Any deal, if it comes, is likely to be too late for this season, however. And as Msweli calculates the costs, he knows there is suffering on the horizon.
“All this is going to cause starvation and hunger,” he said.
Reuters
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