A SWEET MOVE: Trade and Industry minister Rob Davies has come to
the aid of the embattled sugar industry.
Trade and Industry minister Rob Davies has come to the aid of the embattled sugar industry, approving an increase in import duties on sugar.
But although the minister approved the increase of the duty from $566/ton to $680/ton,it is lower than the $856/ton the South African Sugar Association (Sasa) had requested from the International Trade Administration Commission (Itac) in February.
While benefiting sugar producers, the hike in the import duty will hit hard retailers and industrial users such as softdrink manufacturers.
Sasa chair Suresh Naidoo said that the increase granted by Itac would provide some level of protection for the industry but was not sufficient to cover the cost of production. He said Sasa leadership was still analysing the Itac report and would respond comprehensively later. Sasa requested Itac to investigate an increase in import duties in the light of a flood of sugar imports mainly from Brazil, the United Arab Emirates and Swaziland.
The association argued that the current duty provided inadequate protection as it was below cost of production. The impact of the health promotion levy, known as the sugar-sweetened beverage tax, also had to be considered.
About 2,000 members of the sugar industry descended on the department of trade and industry’s campus in Tshwane in June to highlight the plight of the industry, which they said was on the “brink of collapse” due to the flood of imports.
“While the level is not at the maximum bound rate as initially requested by the industry in the application, the $680/ton will provide the immediate relief urgently required by the industry and sufficient trade protection against the surge of imports,” Davies said.
“The tariff forms part of a set of measures considered by government, in collaboration with the industry, in order to improve the sustainability of the industry and future growth prospects. Itac, in its determination of an appropriate level of protection, considers, among others, the domestic cost of production,” he said.
Davies said a sugar value chain task team comprising representatives of the beverage industry, retailers, Sasa officials, small-scale farmers and manufacturers and officials from the Industrial Development Corporation had been formed in May to identify ways of supporting the industry while keeping prices for consumers affordable.