The sugarcane industry in KwaZulu-Natal is poised for significant transformation as farmers and industry leaders explore diversification beyond traditional sugar production.
This move aims to create new revenue streams, enhance sustainability, and mitigate the financial challenges of fluctuating sugar prices and external economic pressures.
Brian Tait, managing director of Infinergy Consulting, said the South African sugar industry relies almost entirely on a single income stream from sugar. As a result, Tait added, the industry’s financial sustainability is reliant on the world sugar price over which it has no control.
Potential for other products
“Diversification into other products based on sugar aims to provide additional income streams that may not be directly related to the sugar price and the vagaries of the world sugar market.
“In particular, the aim would be to divert export sugar, which is sold at a lower price than domestic sugar, to new products. This could mean a higher sugarcane price to the farmers and fuller capacity utilisation by the millers. For example, there should be more cane crushed,” he explained.
Tait said that he has been involved in projects with the South African Sugar Association (SASA) looking at the potential for fuel ethanol, biogas, renewable electricity, sustainable aviation fuel, and polylactic acid.
“These diversification initiatives have not been implemented yet because there are challenges with the local policy and regulatory environment that need to be overcome,” he said.
Impact on sugarcane farmers
KwaZulu-Natal sugarcane farmer Hawu Mbatha expressed optimism about diversification, noting the potential benefits of utilising all parts of the sugarcane plant.
“Diversification would solve the current problem of only RV [recordable value] being paid for while the fibre could be used for various things. Even molasses can serve a variety of needs,” he said.
Mbatha believes that diversification of a sugarcane farm can only help the farm develop and reduce costs and farmers would acquire enough capital to pay their bonds even quicker.
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Lee Hlubi, chairperson of Black Agricultural Commodities Federation (BACF), highlighted the technological advancements enabling sugarcane to be used for biofuels, bioplastics, and electricity through cogeneration.
“Diversifying into these areas can create additional revenue streams, reduce reliance on volatile sugar prices, and contribute to sustainable agricultural practices.
“Diversification can have a positive impact on both farmers and the industry. For farmers, it offers economic resilience by reducing dependency on a single commodity,” she said.
She believes diversification encourages the adoption of innovative farming techniques and technologies, which can improve overall productivity and sustainability.
Maximising the value of sugarcane
Meanwhile, Dr Siyabonga Madlala, executive chairperson of the South African Farmers Development Association (Safda), outlined the association’s strategy to maximise the value of sugarcane through economically viable diversification opportunities.
He pointed to global examples, such as India’s bioethanol production, power, CO2 for beverages, and bioplastics from sugarcane.
“Our organisation, Safda, seeks to pursue economically and financially viable diversification opportunities for its farmers.
“These diversified products should not detract from the financial revenue received through the domestic sugar market but should add value to sugar which would normally be sold at a loss-making world market price,” he said.
Madlala explained that around the globe and in Africa, successful and commercially viable diversification projects exist.
He added that Safda visited India in 2022 where they saw mills and factories that small-scale sugarcane farmers supply produce multiple products including sugar, ethanol, power, CO2 captured for the beverage sector, by-products to animal feed, and biofertiliser.
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