The sugar industry, including sugar cane farming, has been one of the most stable industries in South Africa. The Industry makes an important contribution to the national economy given its agricultural and industrial investments, foreign exchange earnings, high employment and its linkages with major suppliers, support industries and customers.
As is the case with sugar industries world wide, the South African Industry is regulated to facilitate the relationship between growers and millers and to protect the Industry against trade distorting measures, which exist on the world market. The South African Sugar Association (SASA) is constituted in terms of the Sugar Act (Act 9 of 1978) which provides for the Sugar Industry Agreement to regulate the affairs of the Industry. Substantial deregulation of the Industry has taken place during the past ten years and further deregulation is currently being discussed.
Due to the interdependence of millers and growers in the Sugar Industry, SASA has been structured on the basis of a partnership. The milling and growing sections of the Industry are represented by equal numbers of members on the Council of SASA where decisions are reached on a consensus basis.
Revenue is earned from the sale of sugar and molasses on the domestic and export markets, and remuneration for the grower and miller is determined on a predetermined percentage of net proceeds.
Main characteristics and features of the Industry:
- It is a regulated industry.
- The sugar cane producers and the sugar manufacturers are in partnership.
- The final product (sugar) determines the remuneration of both the producer (grower) and the manufacturer (mill).
- Single desk export marketing of sugar.
- The Industry undertakes its own research into cane cultivation, breeding and management and makes this information available to growers through extension officers, to assist in optimising their efficiency. The research station at Mount Edgecombe is one of the best in the world.
- World leader in respect of quality and technology.
- Domestic market price increases that are in line with production costs.
- South Africa is a low cost producer and compares well with the best in the world.
- Although there is a decline in some countries per capita consumption, total consumption still reflects a rising trend in South Africa and the rest of the world due to population growth.