By Prinesha Naidoo.
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South Africa’s International Trade Administration Commission (Itac) plans to review the reference price for sugar amid a flood of imports crippling local producers.
The probe, announced in a government gazette on Thursday, comes after the South African Sugar Association (Sasa), which represents growers and millers, and the Beverage Association of South Africa (BevSA), whose affiliates include local units of Coca-Cola Co and PepsiCo Inc, submitted conflicting applications related to the so-called dollar-based reference price.
Sasa wants the reference raised from $680 to $905 a tonne to protect the local industry.
BevSA wants it reduced to a range of $552 to $650 a tonne to offset the impact of duties affecting beverage producers, bottlers and consumers.
If import prices are below the reference, the state could levy additional duties, while it could lower or impose no taxes if the cost of inbound shipments exceeds the reference.
A combined evaluation of both applications “represents the most efficient and equitable approach to address the diverging requests,” the Department of Trade, Industry and Competition (dtic) said in the gazette.
South Africa’s sugar industry is facing a crisis partly due to a flood of cheap imports and a tax on sweetened drinks that lowered demand from beverage makers.
Annual production has dropped by almost a quarter over the past two decades, while the number of sugarcane farmers has fallen 60%. Raw-sugar futures are near a five-year low, trading at about $329 a tonne.
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