Item added to your cart
The South African Sugar Industry
South Africa rates as one of the world leaders in the production of high quality sugar, grossing an annual turnover of R12bn. From the approximately 19.9 million tons of sugar cane harvested annually by 24,000 registered sugar cane growers, an average of 2.2 million tons of sugar is produced per season. Roughly 75% of this sugar is marketed via the Southern African Customs Union (SACU) with the remainder being delivered to the South African Sugar Association (SASA) for export to markets in Africa, Asia and the USA. The industry generates approximately 79,000 direct jobs, which equates to more than 11% of the total agricultural workforce in the country.
Environmental Opportunities and Difficulties
Globally, the sugar industry is developing an environmental awareness and the South African sugar industry has recognised the need to diversify. As such it is well-positioned to be a much-needed contributor to the production of renewable energy, bio-fuels and bio-plastics. This, however, is dependent on climatic conditions. The South African sugar cane crop in the 2014/15 season was adversely affected by frost and drought conditions that are likely to have cost the industry about R920m. Cane production for this period dropped by more than 11% from the 2013/14 season to 17.7 million tons. So far in the 2015/16 season, nine of the eleven districts in KwaZulu-Natal where more than 80% of the nation’s sugar is produced have been declared disaster areas because of drought. This will have a severe impact on sugar cane farmers who are expecting an estimated loss of more than R1.7bn in gross revenue for the season.
This report on the local sugar industry examines the current conditions and describes how despite its comparative production efficiencies, the South African sugar industry finds it difficult to export profitably to the world market. Factors influencing the success of the industry are also discussed and seven sugar milling companies are profiled. These include market leader Illovo Sugar Ltd, which has an estimated 30% share of the domestic sugar market and manufactures 70 million litres of ethanol per annum.