Farmer's Weekly (South Africa)

Sugar production has stabilised as master plan shows results

The plan has been extended by two years to assist the struggling industry, writes Lindi Botha.

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South Africa’s beleaguere­d sugar industry has stabilised after several years of turmoil as a result of the sugar tax. The Sugarcane Value Chain Master Plan to 2030 was implemente­d to counter the negative effects of the Health Promotions Levy, which currently adds R0,02/g of sugar that exceeds 4g per 100ml. The industry has already received assurance that this tax will remain unchanged for the next two years, bringing greater stability to sugar demand.

The master plan expired on 31 March last year, and government announced that it would be extended for two additional years to aid the sugar industry in its recovery and restructur­ing efforts.

Trix Trikam, the South African Sugar Associatio­n’s executive director, believes that the plan will continue to bear fruit, resulting in his optimism for the industry in the future.

“The challenges notwithsta­nding, the implementa­tion of the master plan has been good for the industry as it has helped to restore, to a certain degree, the local market sales, which were at some stage dwindling.

“Furthermor­e, the plan process has assisted the industry to identify product diversific­ation opportunit­ies, which are critical for the sustainabi­lity of the sector. This is in contrast to the pre-master plan period, which had been characteri­sed by serious challenges that were unfavourab­le for the stability, growth and sustainabi­lity of the industry,” said Trikam.

Total sugar production for the 2023 season came in at 2 030 000t, produced from 18,2 million tons of sugar cane. This is approximat­ely 5% up from the previous season.

This year, the local crop is expected to decrease slightly, depending on the impact of weather patterns and loadsheddi­ng. Trikam said that near-normal summer rainfall was anticipate­d for most of the sugar cane growing areas of South Africa, therefore the impact of El Niño was likely to be minimal.

“So far, we have had good rainfall at the onset of the 2024 summer season. All major irrigation water sources are at or near full capacity and we therefore don’t anticipate water restrictio­ns in the foreseeabl­e future in the irrigated areas.”

He noted that for the irrigated areas, there was a real threat posed by load-shedding, especially given the anticipate­d higher maximum temperatur­es that favoured increased crop water demand. Growers are encouraged to apply best management practices that improve soil water retention and reduce crop stress in general.

Globally, sugar production is estimated to increase in the coming year by 8,2 million tons, resulting in a total global crop of 183,5 million tons. The US Department of Agricultur­e (USDA) reported that higher production in Brazil and India was expected to more than offset the decline in production in Thailand and Pakistan.

The EU will remain the third-largest sugar producer behind Brazil and India and the fifth largest importer. The USDA, however, reports that shifts have taken place in producing countries following regulation­s introduced on pesticide use. Since 2022, the use of neonicotin­oids on sugar beets have been banned in the EU. Neonicotin­oids are used to contain aphids that spread the beet yellow virus, a disease that can cause dramatic yield losses. There are no other reliable alternativ­e insecticid­es for this disease. This has led to a reduction of hectares under production in France, with production shifting mostly to Poland and Spain.

Production in the US for 2024 is estimated to remain the same as 2023, at 8,4 million tons. The country, a notable destinatio­n for South Africa’s exports, is expected to reduce imports by 10%.

Global consumptio­n is anticipate­d to rise to a new record due to growth in markets like India and Pakistan, while growth in South Africa and the US continues steadily.

‘IT HAS ASSISTED THE INDUSTRY TO IDENTIFY PRODUCT DIVERSIFIC­ATION OPPORTUNIT­IES’

 ?? LINDI BOTHA ?? Hectares under sugar cane production are expected to remain stagnant at 240 000ha for 2024.
LINDI BOTHA Hectares under sugar cane production are expected to remain stagnant at 240 000ha for 2024.

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