Sugarcane

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, China, and Thailand (SA is in position 15) (USDA, 2024)
  • Top exporters: Brazil, Thailand, India, Australia, and Guatemala (USDA, 2024).
  • Top importers: Indonesia, China, India, EU, and USA (USDA, 2024)

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).

Challenges to the sector in the 2020-2024 period included production costs “substantially outstripping” general inflation, loadshedding, and a dry spell at the beginning of 2024. Increases in inputs like fertiliser and herbicides are attributed to the weaker rand, COVID-19 freight issues and the Ukraine-Russia war (BFAP, 2024).

Government has not increased the 2018 Health Promotion Levy (HPL) (the “sugar tax”), but an increase even if it is only inflationary is on the cards for 2025. Pre-packaged foods containing more than 10g of total sugar per 100g may soon be required to carry a front-of-pack warning label, which might put additional pressure on the demand for sugar (BFAP, 2024).

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 outlook for the next decade however “is more positive than we’ve seen in the last few years” (BFAP, 2024). The cane area is expected to increase to 362 000 hectares by 2026, and then to drop to 330 000 by 2033 (BFAP, 2024).

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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:

  • The South African Sugar Journal is “the official Voice of the South African Sugar Industry”. Find editions at www.sasugar.co.za
  • 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 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 (under “Old website” option) on the Department of Agriculture, Land Reform and Rural Development website www.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

  • Find the “Sugar Master Plan” option at https://sasa.org.za. in which all partners (the sugar industry, labour, government, retailers and wholesalers, and industrial sugar users) committed to a phased approach to turn this industry around.
  • The Portfolio Committee on Agriculture was provided with updates at the 3 September 2024 meeting “Poultry Master Plan & Sugar Master Plan: dtic briefing; Agro-processing Master Plan: DoA briefing (with Deputy Minister)”. Read the minutes at https://pmg.org.za/committee-meeting/39400.
  • Sugarcane is an important crop for South Africa because it creates jobs, generates foreign income and contributes to agricultural value-addition (Nkunjana, 2022). It has it has both high-growth-potential AND is labour intensive (Sihlobo, 2018).
  • Read about the Health Promotions Levy (the sugar tax) at www.sars.gov.za/customs-and-excise/excise/health-promotion-levy-on-sugary-beverages/.
 

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

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.

 
Tongaat Huletts Sugar Limited – www.tongaat.com
Umfolozi Sugar Mill (Pty) Ltd – www.umfolozisugarmill.co.za
RCL Foods Sugar & Milling – https://rclfoods.com
Cane Testing Services (CTS) – www.sasugarindustrydirectory.co.za The Cane Testing Service (CTS) provides a specialist service under contract to individual Mill Group Boards to determine the quality of individual grower cane deliveries to the mill for cane payment purposes. Find details of the branches in the directory website.
South African Farmers Development Association (SAFDA) – South African Farmers Development Association SAFDA is an association representing small-scale and land reform farmers within the sugar industry and beyond.
SA CANEGROWERS – https://sacanegrowers.co.za
South African Sugar Association (SASA) – https://sasa.org.za
Ethanol Producers Association of Southern Africa (EPASA) – www.epasa.org.za
Du Roi Laboratory – www.duroilab.co.za
South African Sugarcane Research Institute (SASRI) – https://sasri.org.za
Sugar Milling Research Institute (SMRI) – www.smri.org
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.
National Bargaining Council for the Sugar Manufacturing and Refining Industry Tel: 031 508 7331/2
Sugar Manufacturing and Refining Employers Association Tel: 031 508 7300
South African Sugar Industry Agronomists Association – https://sasri.org.za/sasiaa

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.

  • SASA, CANEGROWERS and SAFDA all have publications available which describe in full the diverse aspects of the sugar industry. Visit their websites.
  • Books, technical guides, newsletters and manuals are available from the South African Sugarcane Research Institute (SASRI). Find these on their website, https://sasri.org.za.
  • Grower notes on sugarcane are available on the Department of Agriculture, Land Reform and Rural Development website www.dalrrd.gov.za.
  • Available from the ARC-Agricultural Engineering (ARC-AE) is the booklet “Agro-processing of Industrial Crops (chicory, coffee, sugar cane, tea)”. Visit www.arc.agric.za or call 012 842 4017.
  • Find the Nation in Conversation overview of the sugar industry (March 2017) on YouTube.
  • Find research done by the National Agricultural Marketing Council (NAMC) on sugar, including alternative uses of sugar. Go to www.namc.co.za.
 

Some articles

Table of Contents

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