Several factors are leading to the decline of sugar production in South Africa and threatening its future growth, as per Thabile Nkunjana, an agricultural economist at the National Agricultural Marketing Council (NAMC).
Apart from most protected in terms of tariffs, the sugar industry is most heavily taxed, both domestically and globally, he said. Aiming to reduce the rising level of diabetes and obesity, the government has imposed a Health Promotion Levy (‘sugar tax’) on the sweetener.
The sugar producers are adopting the guidelines issued by the World Health Organisation and providing products as per the changing demand of consumers. The higher cost of production at the local level is affecting the country’s competitiveness in the global market and is one of the main issues the sector is facing.
As per the data available with the South African Sugar Association, domestic sugar production has declined by 12.7% from 2005/6 to 2018/19. The rising cheap sugar imports, increasing production costs, and low domestic production have resulted in the decline in sugar production in the country.
