Canegrowers urge intervention amid Tongaat Hulett’s liquidation

SA Canegrowers called on the national government to intervene in the ongoing challenges faced by the sugar industry in a letter to President Cyril Ramaphosa and a few ministers.

According to SA Canegrowers, they urged the ministers of finance; trade, industry and competition (DTIC); and public works and infrastructure to have a coordinated intervention to help stabilise the South African sugar industry.

“Considering the urgency and time-sensitive nature of the crisis, SA Canegrowers would like to thank minister John Steenhuisen for his engagement with the industry over the past week. There is, however, as of yet, no real solution in sight, with the hearing date for the provisional liquidation of Tongaat Hulett for February 27, 2026.

“Sugarcane growers and the broader sugar industry are not only significant current employers and drivers of rural economic activity, but can serve as a catalyst for new investment, job creation and long-term growth in emerging green-fields industries (such as biofuels) with the right, coordinated government policy framework,” the organisation stated.

‘Save rural jobs and livelihoods’

With Tongaat Hulett’s liquidation, SA Canegrowers said this is not merely about the survival of a single corporate entity, but the systemic importance of the company’s milling operations to the broader sugar value chain and economy.

“Allowing Tongaat Hulett’s operational footprint to collapse would accelerate South Africa’s dependence on sugar imports, increasing long-term exposure to volatile global prices and exchange rate risk. Currently, global sugar prices and the exchange rate may favour importers, but the volatile nature of these markets means that South Africa would be exposed to an uncontrollable inflationary risk.”

SA Canegrowers further stated that what may appear to be a contained corporate failure would, in reality, trigger dire cascading economic consequences across KwaZulu-Natal, Mpumalanga and the national food and beverage system.

Higgins Mdluli, chairman of SA Canegrowers, said, “The cost of stabilising and preserving these operations is materially lower than the long-term social, fiscal and industrial cost of rebuilding a collapsed value chain if rebuilding proves possible at all.

“For this reason, Tongaat Hulett’s operational continuity has become a matter of systemic economic stability. Urgent, coordinated government intervention is required to prevent a failure whose consequences would extend far beyond a single company. We call on the president to coordinate a response to save rural jobs and livelihoods.”

List of actions needed

SA Canegrowers asked for the following urgent government action:

DTIC and ITAC to review and amend the sugar import dollar-based reference price to bring it in line with global economic realities, as per the industry’s submission in 2025;
DTIC and IDC to do all within their power to ensure that the Tongaat mills and refinery remain operational in the immediate future and beyond;
Treasury to scrap the health promotion levy, a tax that has cost the industry 16 000 jobs and R2 billion in revenue in 2018 alone, with no direct evidence of health impacts in the eight years since; and
Recommitment to the outcomes of the Sugarcane Value Chain Master Plan 2030, including a commitment to local procurement of sugar, harmonising sugar supply within SADC, and a commitment to policies that would enable green industrialisation projects, including projects such as sustainable aviation fuels based on ethanol made from sugarcane.