Introduction

Sugarcane is cultivated in tropical and subtropical climates in areas with a plentiful supply of water. Approximately 800mm per annum is needed for a successful crop. Lower rainfall than this leads to difficult times for the industry.

There is a vast global market for sugarcane derivatives.

  • These are prevalent in the modern diet both as raw and refined sugar, syrups, specialised sugars by-products and co-products.
  • Molasses is used in animal feed, baking and the making of ethanol and rum.
  • Bagasse, used as a fuel for boilers and kilns; the production of paper, paperboard products, bioplastics, agricultural mulch and as a raw material for the production of chemicals. Uses of the dried filtercake include utilisation as an animal feed supplement, fertiliser and as a source of sugarcane wax.

International business environment

Sugarcane producers across the world are moving away from a sugar-only output to include energy (electricity and biofuels), and other biobased products (e.g. bioplastics, biochemicals). For this reason, global sugar prices can be driven more by energy prices than by consumer demand for sugar.

  • Top growers: Brazil, India, EU, Thailand, China (SA is in position 16) (USDA, 2023)
  • Top exporters: Brazil, Thailand, India, Australia and Guatemala (USDA, 2023)
  • Top importers: Indonesia, China, USA, Bangladesh and the EU (USDA, 2023)

Further reference:

 

South Africa: imports and exports
  • Cheap imports (especially tariff-free ones from Eswatini) are a challenge for the sector.

Local business environment

Sugarcane is grown in KwaZulu-Natal and Mpumalanga, where it is a strategic crop. Deteriorating conditions motivated the development of the South African Sugar Master Plan in 2020 (see “National strategy and government contact” heading).

At the time of drawing up the Sugar Master Plan (2020) the industry employed an estimated 65 000 people directly, and through upstream and downstream multipliers, supports a further 270 000 indirect jobs (Sugar Master Plan, 2020).

Some 340 000 hectares are planted with sugarcane (BFAP, 2023). Duty free imports from Eswatini, high input costs and the Health Promotions Levy (the sugar tax) suggest that the industry will lose a total of 53 800 hectares and a 6 172 jobs, and for 2 979 small scale farmers’ livelihoods to be threatened (BFAP, 2023).

It has previously been argued that permanent workers can be absorbed into new farming activities but the outlook for seasonal workers is more problematic (BFAP, 2021).

Farmers have been opting for alternative crops like macadamias, bananas, citrus and avocados. These are high-value, capital-intensive crops and so it is more than likely that hectares lost to sugarcane will be lost for a long time to come (BFAP, 2019).

The industry has identified four areas of diversification – cogeneration, biofuels, beneficiation of agricultural residues such as biogas and biobased products.

 

  • Biofuels – implementation of greenfield and brownfield fuel ethanol projects in the SA sugar industry
  • Cogeneration – operationalise sugarcane cogeneration independent power producers as part of the energy mix in South Africa
  • Beneficiation of agricultural residues such as biogas – commercialisation of biogas plants on a range of biogas plants
  • Biobased products – biobased niche products from sugarcane such as bioplastics and biochemical.

 

All four diversification areas aim to harness the full value of the sugarcane stalk producing sugarcane-based products which have already been manufactured in other parts of the African continent and the world.

Source: www.sasugarindustrydirectory.co.za

Further reference:

  • Find the “Sugar Master Plan” option at https://sasa.org.za. The document provides an overview of current conditions in the industry, and a roadmap for the way forward.
  • The annual South African Sugar Industry Directory is an invaluable source of information, statistics and for contacts within this sector; find it at www.sasugarindustrydirectory.co.za.
  • The annual Bureau for Food and Agricultural Policy (BFAP) Baseline Agricultural Outlook includes a section which looks at sugarcane. Find the latest Baseline at www.bfap.co.za.
  • The US Department of Agriculture Foreign Agricultural Service (FAS) periodically covers the South African and eSwatini sugar industries. Find these reports on the Internet.
  • Find the latest Sugar Market Value Chain Profile on the Directorate Marketing pages on the Department of Agriculture, Land Reform and Rural Development website www.old.dalrrd.gov.za.
  • Refer to the “Some articles” sub-heading further down this page.

For the newcomer

The South African Sugarcane Research Institute (SASRI)’s extension service provides the essential link between SASRI researchers and farmers through consultation and feedback. Find contact details of extension managers and extension specialists at www.sasugarindustrydirectory.co.za/directory.

The South African Cane Growers’ Association provides technical skills training for new and emerging cane growers, accounts and financial management workshops, regional economic advisors, a grower support service officer and access to a special VAT and diesel dispensation for small-scale growers.

The South African Farmers Development Association (SAFDA) provides training, but also has fertiliser, logistics, diesel and farm management initiatives as well as grower support staff to benefit growers. Find contact details for agricultural managers, district co-ordinators and grower support officers at https://sa-fda.org.za.

The milling companies also provide extensive service in support of the cane-growing operations of small- medium- and large-scale black farmers.

National strategy and government contact

Sugar and renewable energy

 

Globally, sugarcane industries have responded to the need for renewable energy, by diversifying from being producers of sugar to sugar and energy.

 

The biomass called bagasse, produced during the processing of sugarcane, can be used to generate steam and electricity. Sugar mills in South Africa already do this for their own energy needs. They have the capacity to inject significant amounts of surplus power into the national grid, which would make a significant contribution to green and renewable energy when this does become a priority for government.

Role players

Companies

Note: Click to expand the headings below.  To get a free listing on our website like the ones below, visit here for more information or place your order here. Disclaimer: The role player listings are not vetted by this website.

Training, Consulting & Research Service Providers
Shukela Training Centre (STC) https://sasa.org.za Find the STC page on the SASA website.
WOMOBA Innovative Sustainability www.womoba.co.za Womoba is a subsidiary of the SA Canegrowers Association and helps farmers with developing sugarcane by-products like biogas, ethanol and juice.
AgriSETA www.agriseta.co.za Find details of the National Certificate: Sugar Industry Technical Maintenance, National Certificate: Sugar Manufacturing and Refining Technical Maintenance, National Certificate: Sugar Processing and National Certificate: Sugar Technology at www.agriseta.co.za.

Further reference:

Associations

  • Also of relevance is Association of SA Sugar Importers (Asasi); Beverage Association of South Africa (BEVSA) (see www.bevsa.co.za); and the South African Sugar Converters’ Association (Sasca).

Companies involved

  • Find details of the milling companies – Gledhow, Illovo Sugar Limited, Tongaat Huletts Sugar Limited, RCL Foods Sugar & Milling, UCL Company Limited and Umfolozi Sugar Mill (Pty) Ltd – and of their milling operations in the South African Sugar Industry Directory at  www.sasugarindustrydirectory.co.za.

Websites and publications

Visit the websites listed earlier on this page.

Some articles

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