In our previous publication of The Link, we provided you with an advisory note on possible biosecurity risks and cane deterioration in the event of potential disruptions to the milling of sugarcane. This was in anticipation of disruptions to the operations of Tongaat Hulett Limited (THL) mills in the Maidstone, Amatikulu and Felixton mill supply areas (MSA) in particular. As announced in the media, the Industrial Development Corporation (IDC), has agreed with the Business Rescue Practitioners (BRP) to provide a further R200 million post-commencement finance (PCF) to THL. Such funding serves to facilitate the operations of THL for a limited period while the dispute between various parties is being carefully considered. In the interim, growers can deliver sugarcane to THL mills as they remain operational; that in turn reduces the biosecurity risks and cane deterioration, hopefully resulting in good recoverable sugar yields. Growers are advised to plan and remain alert to any potential biosecurity risks.

Tongaat Hulett Limited’s challenges are symptomatic of operating risks affecting the sugar industry in South Africa. The potential collapse of THL could devastate the livelihoods of many rural communities, mainly in the Kwa-Zulu Natal province, with consequences for the rest of South Africa’s economy. Current challenges for the sugar industry include imports from Brazil, India and other countries flooding the local market at below production costs. Both large-scale and small-scale growers have been adversely affected by these imports as they reduce their income. Supply disruptions emanating from the war in the Middle East have now resulted in substantial fuel price increases, exacerbating input costs for fertilisers, pesticides and other operations for growers. The combined adverse impact on the sugar industry could directly devastate the livelihoods of at least 24,000 sugarcane growers (large-scale, small-scale and land reform) in Mpumalanga and Kwa-Zulu Natal, with consequences for millions of livelihoods in South Africa.

To ensure sustainable livelihoods, the sugar industry has, in the last 100 years, invested in research, technology development and innovation at the South African Sugar Research Institute (SASRI). Consequently, SASRI operates the largest sugarcane breeding programme in Africa and is recognised to be among the leaders globally. The Institute has produced highly adapted sugarcane varieties suitable for diverse agro-climatic zones, including the southernmost sugarcane-growing region worldwide, often considered too cold for the crop. Through international collaboration in research and development, SASRI and other institutions have developed scientific solutions and technologies that have enabled production of various products derived from sugarcane (e.g. sucrose, molasses, bagasse, ethanol, etc.).

Lessons from other countries provide insights towards enabling a sustainable bioeconomy that could positively impact South Africa’s sugar industry.

To support a sustainable sugarcane-based bioeconomy, diversification is possible in South Africa, as demonstrated by examples in other parts of the world:

• Brazil built a world-leading ethanol industry by introducing clear, long-term policies: blending mandates, fuel pricing incentives, and infrastructure investment.
• Thailand diversified into ethanol, biomass power, paper, bioplastics and animal feed by investing in technologies that extract value from bagasse, molasses, and tops.
• India’s success in progressing alternative uses of sugarcane was due to a combination of factors, including strong research and development, and a well-established sugar industry.
• The successes of Thailand, Brazil and India were mainly due to the government support, especially in the form of subsidies.
• Colombia’s sugarcane research institute, Cenicaña, enabled the industry to use sugarcane to produce sugar, bioethanol that is blended with fuel, vinasse used as fertiliser, and bioenergy from the mills that is also supplied to the national electricity grid.
• In Zimbabwe, Kenya and Ethiopia, sugarcane diversification efforts focus on utilising sugarcane by-products for biofuels (ethanol and bioelectricity), bioplastics, and other value-added products, reducing reliance on traditional sugar markets.

To enable sustainable livelihoods among growers and communities, the sugar industry is exploring pathways for developing and producing diversified products. Diversification will require significant investment, policy and regulatory adjustments. Government and the private sector will need to collaborate to achieve the objectives of a bioeconomy for the sustainable development of our communities.

The Link is a short newsletter that provides advice on key aspects for sustainable sugarcane production and productivity. We hope you will gain insights from these articles, gather additional information, especially from the experts at SASRI, and apply such knowledge in your farming practices. We hope you enjoy reading the articles.