South Africa's Sugar Industry Cautions About Increased Risks from Deep-Sea Imports

On July 19, 2024, South Africa reduced customs duty on sugar imports from ZAR 1,409 per ton to ZAR 1,094 per ton.

The South African Sugar Association (SASA) is concerned that the recent reduction in import duties could lead to an influx of sugar imports from the global market. The recent development could pose a threat to the domestic sugar industry by potentially undercutting prices and market share for domestic producers.

Trix Trikam, the executive director of the SASA, explained that the recent decrease in the customs duty was triggered in April 2024, a period when global sugar prices were higher. SASA has requested the government expedite the processing of triggers and the official publication of duty rates. They emphasized that timely execution of procedures is crucial to achieving the intended policy outcomes and maintaining stability within the industry.

Since July 19, 2024, import parities across South African cities have improved further, widening the possible margins. As of Friday Aug 2, 2024 refined sugar from India and Brazil to Cape Town were USD 92/MT and USD 127/MT respectively. On the same day, Durban had a USD 144 positive parity per metric ton for Low Quality Whites from Brazil (See Figure 3)