Sugar Industry Turnaround in South Africa Delayed by Virus

(Bloomberg) --

A plan to support South Africa’s ailing sugar industry has been delayed by the coronavirus pandemic.

The signing of the so-called Sugar Master Plan is being pushed back because the Department of Trade, Industry and Competition, which oversees the strategy, is also helping to coordinate South Africa’s response to the virus.

The government, farmers and industrial users in the 14 billion-rand ($833 million) industry worked on a strategy to stem a crisis caused by a flood of cheap imports and a tax on sugar-sweetened drinks that lowered demand from beverage makers. President Cyril Ramaphosa said in his Feb. 13 state-of-the-nation address that a Sugar Master Plan would be finalized within six weeks, but the country entered a strict lockdown on March 27.

“We understand that Minister Ebrahim Patel has been busy with immediate Covid-19 priorities, which has delayed the signing of the Sugar Industry Master Plan,” Rex Talmage, chairman of the South African Canegrowers Association, said in an emailed response to questions. “We expect that it will be signed off by all stakeholders soon.”

Sidwell Medupe, a spokesman for the department, didn’t immediately respond to a phone call and text message seeking comment.

The plan includes tapping into the biofuel potential of cane, the South African Sugar Association said in February.

Read more: South African Sugar Master Plan to Allow for Biofuel Production

Most of South Africa’s sugarcane is grown in the east of the country and the industry supports about 85,000 direct jobs. The tax on sugary beverages that came into force in 2018 as a health promotion levy has led to industry losses of more than 3.6 billion rand and a decrease in employment, according to South African Sugar Association data.

©2020 Bloomberg L.P.

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