Question NW763 to the Minister of Trade and Industry
29 March 2016 - NW763
Hill-Lewis, Mr GG to ask the Minister of Trade and Industry
Whether, with reference to the prevailing drought in the country and the sugar industry’s own forecasts of a significant shortage in local production of sugar for 2016 and 2017, he is considering a temporary removal of duties on imported sugar to assist consumers and alleviate food price inflation; if not, why not; if so, what is the progress in this regard?
Reply:
The sugar industry has assured us that they have produced sufficent sugar to supply the domestic market in 2015/16 year despite the severe drought in several sugar growing regions. Thus sufficient raw sugar is in stock at the sugar terminals with a small surplus for export. However, due to the unexpectedly high demand for refined sugar especially by the soft drinks manufacturers – due to hot summer period, the industry experienced low stocks of some grades of refined sugar. At the beginning of March 2016 the sugar industry met to implement a strategy to restore supply of refined sugar into the domestic market. This resulted in the two biggest refineries namely Noodsberg and Hullets opening up early for refining purposes as the industry is currently off season, in addition to working over the the public holiday period in March. The rest of the refineries will open in April as the new sugar season starts on 1st April 2016.
The figures received from the sugar industry regarding 2016/17 production estimates, current available supply and carry over stock into the new season from the 2015/16 crop, indicate sufficent supply into the local market going forward. Noting that the supply to the local market consists of SA production,SACU production (Swaziland), SADC quota and duty paid imports as well as imports from the rest of the world, we are confident that supply will be sufficient to meet local demand. In the event of a supply shortage, the department will engage with the industry and International Trade Administration Commission (ITAC) to initiate a rebate facility to counter the effects of the duty on imports, subject to statutory requirement of the process.
There is currently no consideration to remove the current duty as it was arrived at through a review process undertaken by ITAC within the provisions of the ITAC Act and because supply has been stabilised. Any stakeholder can apply for either a rebate facility or reduction in the duty directly with ITAC at any point should they deem this necessary.