South Africa’s sugar industry must urgently diversify its operations into biofuels and sustainable materials and leverage the international market to survive years of headwinds.
This is according to agriculture minister John Steenhuisen, who met the sugar industry in KwaZulu-Natal on Friday. Ahead of the meeting , he told TimesLIVE Premium that the industry needed to be protected from sector taxes as it prepared to diversify.
“There is a need for us to make sure that we protect that sector until such time as they are able to diversify sufficiently. It is also why I’ve been raising the issue about biofuels and why we need a proper biofuels strategy for South Africa,” he said.
He said there were opportunities for South Africa to decommission coal-fired power stations in Mpumalanga and the sugar industry to provide alternative energies and create jobs in the modernised energy sector.
“I think that we can look at starting to drive biofuels there so that those people who are now in coal-fired electricity generation can be transitioned into biofuel generation.
“Given the fact that there are now targets being set internationally by airlines and shipping companies on the percentage of biofuels, we need to get moving on biofuels. We’ve spoken about it for 10 years, and biofuels provide an absolutely excellent opportunity for our sugar-cane producers.”
On leveraging export markets, he said: “There is ... a very interesting development starting to occur in Europe, and that is around the subsidy system, [which is] starting to creek ... I think it would make far more sense for European consumers to have South African sugar than to be subsidising heavily production of sugar there.”
Independent researcher Brian Tait said research for the South African Sugar Association into diversifying product inputs for cane growers and sugar mills was at an advanced stage. For example, bioethanol could bring 21,000 new jobs through harvest season extension and new cane requirements.
“We have been working closely with Sasa and the sugar industry over the last 10 years ... on quite a broad array of diversification projects ... Bioethanol is one of the low-hanging fruits. Ethanol worldwide is a product with consumption of over 120-billion litres per annum, and most of it is blended into petrol to produce a portion of renewable fuel in the fossil fuel group.”
[The department of] agriculture should be more supportive ... There should be some basis in terms of giving them short-term loans, and there is, but to go through the loop of getting it is very difficult
— Harry Spain, business rescue practitioner
The sugar sector could supply up to 375-million litres of sustainable aviation fuel to the local market, but this would also require government incentives because there is no legal requirement for local airlines to use sustainable fuels, and these fuels are now more expensive than jet fuel.
The 2025 budget, which was postponed last week, contained a proposal that a scheduled hike to the sugar tax in April be cancelled.
“An inflationary increase in the health promotion levy was due to take effect from April 1 2025. Government proposes to cancel this increase to allow the sugar industry more time to restructure in response to regional competition.”
Business rescue practitioner Harry Spain told TimesLIVE Premium that the sugar industry is a vibrant sector but is vulnerable to many headwinds. He said remaining cane growers and milling companies required assistance from the government.
“The sugar industry is one of the biggest employers, direct and indirect, in the country ... It’s like a farming industry. If it doesn’t rain, you get no crop. If you have a flood, you’ve got no crop. So [the department of] agriculture should be more supportive ... There should be some basis in terms of giving them short-term loans, and there is, but to go through the loop of getting it is very difficult.”
Spain oversaw the successful business rescue of the Gledhow Sugar Company in Stanger, KwaZulu-Natal, in 2023.
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