South Africa has raised the Dollar-Based Reference Price (DBRP) for sugar imports from US$680 to US$785 per tonne, offering some relief to domestic producers facing rising imports, although growers and major sugar companies say the new level may still be insufficient, according to a report by IOL News.
The increase follows a review by the International Trade Administration Commission (ITAC), which considered competing proposals from the South African Sugar Association (SASA), which sought a benchmark of US$905 per tonne, and the Beverage Association of South Africa, which had proposed reducing it to between US$552 and US$650.
ITAC said neither proposal adequately balanced the need to support domestic sugar producers with the interests of downstream users and consumers, while also taking into account South Africa’s commitments under the World Trade Organization.
Under the DBRP mechanism, a variable import duty is triggered when international sugar prices fall below the reference price. ITAC’s initial calculation places the duty at around South African rand 6,979 per tonne.
ITAC’s review noted that the domestic sugar industry has been affected by volatile sugar prices, rising production costs and weakening production and profitability, while imports, particularly from Brazil, have increased.
SA Canegrowers welcomed the move but said its effectiveness would depend on whether it actually curbs imports. Duty-paid sugar imports rose sharply from 1,619 tonnes during January-June 2022 to 124,594 tonnes in the same period this year, according to the organisation.
It said local sugar sales have fallen by around 188,000 tonnes, or 35%, over the past three seasons, while grower revenues declined by 1.33 billion South African rand.
Illovo Sugar South Africa was more critical, saying the US$785 benchmark remained below the level needed to protect the domestic industry. The company said 213,322 tonnes of sugar from outside the Southern African Customs Union entered South Africa during the 2024-25 season, resulting in an estimated 1 billion South African rand loss for growers and 500 million South African rand for millers.
Illovo has called for additional short-term safeguards against deep-sea imports, another review of the DBRP and a faster-responding tariff mechanism.
Organised labour also supported the increase, with Cosatu saying it would provide relief to an industry employing more than 70,000 workers directly. However, the union said the tariff alone would not resolve challenges related to electricity costs, logistics, illicit imports and support for emerging farmers.
ITAC said the revised benchmark aims to help domestic producers recover costs, manage price volatility and remain competitive against imports while limiting the impact on downstream users and consumers. The commission plans to review the DBRP after three years, although an earlier review remains possible depending on market conditions.
For South African sugar producers, however, the immediate test will be whether the higher benchmark actually slows the flow of imported sugar into the country. As SA Canegrowers chairman Higgins Mdluli put it: “Growers need certainty, not another partial fix.”
