• Producers and beverage makers clash over import protection mechanism

• Sugar association wants DBRP raised to $905 per ton; beverage group seeks cut

• Decision comes as global sugar prices fall and sector pursues reform plan

A battle is unfolding in South Africa over the future of the country’s sugar import protection system, as two powerful industry groups push opposing revisions to the Dollar-Based Reference Price (DBRP), the core mechanism shielding domestic producers from low-priced imports.

The South African Sugar Association (SASA) and the Beverage Association of South Africa (BEVSA) have each filed formal submissions to the International Trade Administration Commission (ITAC), which said in late January that it would collect additional data and comments from stakeholders across the sugar value chain before making a determination.

Since July 2018, the DBRP has been set at $680 per ton. Import duties are triggered when the 20-day average price of the London No. 5 sugar contract falls more than $20 below that level. In practice, when prices drop below $660 per ton, a tariff of 1,093.60 rand (about $64.2) is imposed on every ton imported.

The DBRP forms part of South Africa’s framework for regulating sugar trade with countries outside the Southern African Customs Union (SACU), which includes Botswana, Eswatini, Lesotho and Namibia. The mechanism allows additional duties to be levied when import prices fall below the reference threshold, with the goal of protecting local producers from global price volatility.

The reference price is calculated using the six-year average of the London No. 5 white sugar contract, with a 40% adjustment added to account for local production costs and subsidies granted in major producing countries. The intention is to reflect a price deemed sustainable for South Africa’s sugar industry.

Opposing Demands

The heart of the dispute lies in how high the DBRP should be set.

SASA has asked ITAC to raise the reference price to $905 per ton, arguing that stronger protection is necessary to safeguard the industry’s financial viability.

South African cane growers are facing significant financial losses due to rising imports, according to SASA. The association estimates that in 2025 alone, the impact has reached 733 million rand, with imported sugar displacing local production in the domestic market. It argues that the current DBRP is not properly aligned with prevailing market conditions and has allowed a record surge of imports.

BEVSA, by contrast, is calling for the DBRP to be reduced to a range between $552 and $650 per ton. The association argues that current tariff levels increase costs for beverage producers, bottlers and consumers.

SASA has criticized that proposal, warning that lowering the threshold could weaken the domestic sugar value chain. It argues that global sugar prices are cyclical and that short-term price declines should not justify undermining local production capacity.

A Delicate Decision

ITAC’s task is complicated by shifting market conditions. Over the past decade, the commission has raised the DBRP several times, from $358 per ton in 2009 to $566 in 2014 and eventually to the current $680 level, tracking the upward trend in global sugar prices.

That trend has now reversed. Raw sugar prices fell 6.4% in 2024 and declined by a further 17% to 22% in 2025. White sugar prices dropped more than 15% after a similar decline the previous year, while futures contracts in New York and London reached five-year lows in early February.

The drop in international prices is likely to weigh heavily on ITAC’s deliberations. But the decision carries broader implications. Since 2020, the industry has been implementing the South African Sugar Value Chain Master Plan, a reform strategy running through 2030 that aims to stabilize the sector, protect jobs and diversify production into byproducts such as ethanol.

The plan relies in part on strategic trade protection, even as it seeks over time to reduce reliance on tariffs and build a more competitive, diversified sugar industry.

How ITAC balances short-term market pressures with long-term industrial policy objectives will determine not only the level of future sugar imports, but also the trajectory of one of South Africa’s most politically sensitive agricultural sectors.

Espoir Olodo