The South African Canegrowers Association has urged Finance Minister Enoch Godongwana to use the upcoming Medium Term Budget Policy Statement on October 21, 2026, to scrap the Health Promotion Levy (HPL), widely known as the sugar tax.
“The sugar tax is a burden on the sugar industry that the government can lift immediately. Policy certainty is essential to enabling long-term investment, diversification, and a sustainable future for South Africa’s sugar value chain,” said SA Canegrower Chairman Higgins Mdluli.
The call follows an 18% drop in sugarcane harvesting during the previous season.
The financial fallout extends far beyond large-scale agricultural production. Small retail outlets, township spaza shops, and independent grocery stores have absorbed increased wholesale prices for sugary beverages.
These costs are passed down by manufacturers and distributors who are trying to cover the 2.1-cent-per-gram levy on drinks containing more than 4 grams of sugar per 100 ml.
Ultimately, these levies impact more than a million livelihoods, supporting over 27,000 small-scale growers, farmworkers, mill employees, and broader supply chain networks. The economic health of rural towns across Mpumalanga and KwaZulu-Natal is deeply intertwined with this ecosystem, leaving vulnerable communities exposed to compounding economic distress.
Illovo Sugar Managing Director Ricky Govender noted that during the 2024/2025 season, sugar imports from outside the South African Customs Union region surged to 213,322 tonnes. Combined with the sugar tax, this influx drove substantial revenue drops, costing growers and millers R1 billion and R500 million, respectively.
Global Africa Nature’s Ravanya Naidoo proposed that revenue generated from the sugar tax could be redirected back towards the sector to support product diversification.
This aligns with the broader Sugarcane Value Chain Master Plan, fostering innovations such as bio-inputs derived from sugarcane by-products to provide growers with additional revenue streams.
The success of the Master Plan—a critical social compact between government and industry stakeholders—depends heavily on proactive policy alignment to address these overlapping threats and unlock long-term sector resilience.
