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Transnet CEO Michelle Phillips says the sale of a 49.99% interest in its largest container terminal last year to International Container Terminal Services had set the tone for the way in which the State-owned group would approach other private sector participation (PSP) transactions across its rail, ports, and pipelines businesses.

Having faced two years of legal delay, the sale of the stake in the Durban Container Terminal Pier 2, now trading as the Durban Gateway Terminal, generated a profit on disposal for Transnet of R12.5-billion.

The one-off windfall emerged as a major contributor to Transnet swinging into a R4.6-billion profit in the year to March 31, 2026, after the group reported a R1.9-billion loss in the prior year.

Phillips said the Durban Gateway Terminal transaction demonstrated the group's ability to "transact for value" when pursuing PSPs, which she said were now integral to its current strategy and in line with government's policy of encouraging greater competition in markets hitherto monopolised by Transnet.

She acknowledged, however, that some transactions, including a plan to concession the lossmaking container rail corridor between Durban and Johannesburg, could involve unlocking strategic benefits rather than commercial proceeds.

"We bleed on that line. So, if it's possible that someone else can run that line, and it further reduces the cost that we expend on it, then that would also be of value for us," she said.

Transnet expected to initiate a request for qualification process for the so-called Container Corridor PSP before the end of the year.

However, it indicated that it was aware that it might be difficult for private concessionaires to put forward a profitable business case in the absence of some form of support from the public sector or the fiscus.

Likewise, Transnet's plan to dispose of a number of properties was largely motivated by a desire to reduce the ongoing costs associated with operating and maintaining these properties rather than making significant profits on the sales.

Nevertheless, the group is still aiming to realise some R1-billion from such disposals in the coming financial year and recently invited requests for proposals (RFPs) for 15 noncore properties, including the Carlton Centre, golf courses in Bloemfontein and Ekurhuleni and a mall in KwaZulu-Natal.

THREE PSP WAVES

Phillips used the group's results presentation to outline what she described as a sequenced PSP portfolio, comprising of three "waves".

The completed Durban Gateway Terminal transaction was listed as part of the first wave, along with three other PSPs that had been released into the market or would be released imminently, namely:

the Richards Bay Dry Bulk Terminal, the submission deadline for which was recently extended;the Ngqura Manganese Export Terminal, the RFP documentation for which is due to be released in September; andthe process initiated to secure a partner for a LeaseCo entity, which will lease rail rolling stock to train operating companies in South Africa and the region.

Also included in 'Wave 1' was the Container Corridor PSP and the Fibreoptic PSP, where pre-procurement structuring was still under way.

In 'Wave 2', Transnet intended pursuing private partners for its rail fuelling facilities, yards and depots, its agriculture and multipurpose terminals, and for gas and jet-fuel pipelines and storage infrastructure.

It was also assessing strategic collaborations under 'Wave 3' for its iron-ore and coal corridors.

Phillips said the implementation of these PSP transactions was likely to have an impact on the way Transnet was structured in future, as it would have a number of entities that it no longer managed directly.

"We will also need to manage a venture portfolio, and we believe that as we manage those venture portfolios, we will manage them for profit," she said.

VOLUMES FALL SHORT

The integration of PSPs into the group's strategy would be pursued in parallel to ongoing initiatives aimed at inc...

Clicks' Cape Town distribution centre to operate 100% electric truck fleet by year-end

The Clicks Group's Montague Gardens distribution centre in Cape Town is gearing up to operate a 100% electric truck fleet by year-end, as the retailer accelerates the electrification of its national distribution network.

Clicks' third-party logistics partners have secured 30 Sany heavy-duty electric trucks, while the retailer has also invested more than R65-million in solar PV generation, battery energy storage and charging infrastructure across its network to support its transition from fossil fuels

The new trucks from the Chinese manufacturer offers 380 km to 400 km range, with DC fast-charging taking the trucks from 20% to 80% in 30 minutes. Payload is 11.5 t.

The expected distance each truck will travel a year is between 110 000 km and 120 000 km.

Clicks Group CEO Bertina Engelbrecht says the move to electric transport forms part of the retailer's broader investment in its distribution network.

"As we expand our store and pharmacy network, we continue to strengthen our distribution capabilities to support that growth.

"We started moving towards renewables several years ago because, as an executive team, we see ourselves as stewards for future generations.

"There is also a strong business case for doing this," she adds. "Electric trucks reduce our reliance on diesel and our emissions, while lowering the cost of operating our distribution network."

The 30-strong truck fleet is expected to save around 780 000 litres of diesel, while also voiding around 2 000 t of tailpipe CO2 emissions a year.

Yearly fuel savings are calculated at between R20-million and R25-million, together with a further R2-million to R3-million reduction in maintenance costs.

The 30 electric trucks will be rolled out across Clicks' Cape Town and Centurion (Gauteng) distribution centres.

Montague Gardens is expected to operate a 100% electric truck fleet by the end of October.

The Cape Town fleet will deliver to roughly 290 stores, while the Centurion fleet will serve around 566 stores.

The Sany trucks can be charged using a combination of solar-generated energy, stored energy and grid power at both distribution centres.

The electric-truck rollout will extend to KwaZulu-Natal by September next year.

Clicks expects to have 68 electric trucks on the road by the end of next year, representing around 62% of its current fleet, which is well ahead of its original target of 30% electric by the end of 2029.

The group is also targeting a more than 90% electric truck fleet by September, 2028.

Clicks already operates Maxus electric delivery vans, as well as the smaller locally assembled three-wheel electric MellowVans, with plans to introduce electric bikes for omni-fulfilment.

The request for proposals (RFP) issued for the appointment of a transaction adviser to support the establishment of a fully independent Transmission System Operator (TSO) confirms that the adviser will not re-evaluate the policy decision to establish the TSO as a State-owned entity outside of Eskom and with ownership and control of the transmission network.

This policy decision was reaffirmed as "feasible and in line with international best practice" in a Phase I report by the Eskom Restructuring Task Team (ERTT), and was subsequently endorsed by President Cyril Ramaphosa at the end of July.

In February, Ramaphosa set up the ERTT to develop a detailed proposal and implementation plan for the creation of such an entity, contradicting an earlier Eskom plan for the TSO to be set up without the transmission assets and for those to continue to be held by an Eskom Holdings subsidiary.

The RFP, which is now available, states that the assignment is confined to advising on an optimal transaction structure and assisting with executing the transaction in accordance with the approved roadmap.

This, too, is in line with Phase II, during which the ERTT is expected to deliver a detailed implementation plan with timeframes for completing the restructuring "in the manner proposed".

The RFP, which includes various time-defined milestones for the adviser, states that the establishment of the TSO should be completed by December 31, 2027.

Issued for the National Treasury by the Infrastructure Finance and Implementation Support Agency, which is hosted by the Development Bank of Southern Africa, the RFP has a submission deadline of September 28, with a compulsory briefing session for prospective bidders to be held on September 14.

Should a bidder meet the various qualifying criteria outlined in the document, including proof of at least two assignments with a minimum transaction value or asset value of R50-billion where the company successfully led or advised on corporate restructuring, the submission will be evaluated using an 80/20 points system, with 80 points related to price and 20 points for broad-based black economic empowerment.

LENDER ENGAGEMENT

The appointed adviser is expected to provide integrated financial, legal and tax advice to the National Treasury on the transaction, as well as on a lender-engagement strategy.

"The proposed restructuring is likely to trigger consent requirements across a substantial portion of Eskom's debt portfolio, so a strategy for engaging with and securing the required consents from lenders must also be developed," the document reads.

The project scope, thus, specifically requires the transaction adviser to advise on the development of a strategy for and facilitate engagements with rating agencies and lenders to secure the "consents, waivers, amendments or approvals" required to close the transaction.

The adviser is also expected to facilitate engagements with potential lenders to secure cost-effective financing for Eskom, the TSO and the fiscus to finance the transaction and future capital investment.

It is also expected to confirm the opening capital structure of each entity, as well as the allocation of existing debt and government guarantees, while advising on the issues to be addressed in the execution of the transaction, including the transfer of staff, assets, and contracts.

Besides a step-by-step implementation plan for the legal separation of the National Transmission Company South Africa from Eskom, a dispute-resolution mechanism between stakeholders during the course of the project should also be recommended.

The document reaffirms that this should be performed while meeting several core principles, from maintaining energy security and ensuring that Eskom is no worse off than its current financial position following the restructuring, to positioning the TSO to be able to raise the funding required for investment in infrastructure in line with the Transmission Development Plan.

By excluding from it...

The Competition Commission's '2026 Cost of Living' (COL) report shows that household budgets are under sustained pressure as electricity, water, petrol, transport, healthcare and communication costs continue to rise faster than overall inflation.

The commission also raises concerns that consumers are not always benefiting from lower input costs. In several food markets, including brown bread, maize meal and sunflower oil, the producer prices remain elevated despite significant decreases in the price of grains and oilseeds.

In other food markets, such as individually quick frozen (IQF) chicken and canned pilchards, the retail price remains elevated despite stable or declining producer prices, the report says.

The COL report provides insight into the affordability of basic food and non-food items, particularly for low-income households.

The analysis shows that, although price pressures differ across different categories, essential expenditure continues to place significant pressure on household affordability.

Between July 2025 and July this year, electricity prices rose by 8.1% and water prices by 10.1%, both significantly above overall inflation of 4.3%. Over the six-year period, both electricity and water prices increased well above cumulative overall inflation, the report shows.

Similarly, general practitioner consultation costs increased by 3.5% between January 2025 and January this year. Over six years, these costs rose by 38%, which exceeded cumulative overall inflation of about 36%.

Petrol prices increased by 26% between January and July this year, driven largely by global pressures linked to the Middle East conflict.

Minibus taxi fares increased by 13% over the same period, which raises concerns that commuters may continue to face higher costs even if petrol prices decline, as taxi fares generally do not adjust downwards.

Additionally, wireless Internet service prices increased by 4.1% between January and July, which is above overall inflation of 3.8% over the same period.

Further, the COL report also examines the spread between what producers receive and what consumers pay for selected foods, including canned pilchards, eggs, IQF chicken, brown bread, sunflower oil and maize meal.

The spread reflects the percentage difference between the producer and the retail prices.

Higher fuel and transport costs have increased production, logistics and distribution costs across the economy, adding additional upward pressure on the prices of basic goods. This is reflected in several food markets.

However, in some markets, producer or retail price increases to historically high levels raise concerns that these increases are not cost-reflective and may not decrease when fuel prices normalise.

The commission says it will continue to monitor these markets closely.

Egg producer prices have increased substantially since April, coinciding with the fuel price increases during this period.

Additionally, the retail prices of IQF chicken and canned pilchards have been increasing this year, despite producer prices for both items remaining stable and declining over the same period.

For brown bread, maize meal and sunflower oil, the producer prices remain elevated despite significant decreases in wheat, maize and sunflower seed prices.

This is concerning as consumers are not seeing the benefits of lower grain and oilseed prices, the report points out.

The COL report also focused on water, where similar affordability concerns arise.

Water tariffs are primarily shaped by the costs and institutional arrangements across the water value chain, which highlights an important policy challenge of ensuring financially sustainable water services without placing an excessive affordability burden on households.

Ongoing sector reforms provide an important opportunity to address these challenges, the commission states.

Greater transparency and consistency in tariff setting, stronger oversight across the water value chain, improved infrastructure investment a...

Engineering News editor Terence Creamer discusses Eskom's R30-billion profit for its 2026 financial year, as well as the lower sales and rising municipal debt and electricity theft that weigh on the State-owned entity's sustainability.

The National Treasury has secured €300-million in concessional loan financing, equivalent to R5.6-billion, to support its Metro Trading Services Reform (MTSR) programme, which is aimed at turning around electricity, water and sanitation, and solid waste management in the country's eight metropolitan municipalities.

The funding has been committed by German and French development finance institutions KfW Development Bank, which has approved €200-million and Agence Française de Développement (AFD), which confirmed a €100-million loan.

Both loans have been extended in line with France and Germany's Just Energy Transition (JET) mandate, with KfW and AFD arguing that the MTSR will contribute to the implementation of the municipal component of the JET-Investment Plan (JET-IP).

Despite the withdrawal of the US from the JET-IP in 2025, overall commitments still stand at $12.8-billion, with both Germany and France having already disbursed some concessional funding. These have mostly been in the form of policy loans to the National Treasury to support agreed energy sector reforms.

Some grant funding has also been released, but there is ongoing criticism over the relatively small grant component in the JET-IP funding envelope.

In a joint statement with the National Treasury, the development finance institutions said that improving the performance of municipal services was a prerequisite for delivering the JET and would help accelerate the public and private investments needed to address infrastructure backlogs and modernise electricity distribution networks.

Separately, German Cooperation, also through KfW, had approved €350-million for Johannesburg and Cape Town over the last two years to fund investment in grid infrastructure upgrades and renewable-energy integration, while AFD has long-standing funding partnerships with Johannesburg, eThekwini and Cape Town.

There are indications that Johannesburg used the funding in August to settle its accumulated overdue electricity debt to Eskom of R5.3-billion.

Finance Minister Enoch Godongwana said the €300-million would be used to strengthen government's broader programme of support to improve the governance, financial sustainability and operational performance of trading services in cities where some 22-million people reside.

The MTSR, which was unveiled in his February Budget, forms part of a package of local government reforms that involve a more interventionist approach by the National Treasury, including actions to address capacity constraints to deliver infrastructure.

This stance came into public view earlier this year when Godongwana temporarily withheld the transfer of the July equitable-share funding to 69 municipalities, including Johannesburg, to put pressure on municipalities to address various problems, including the non-payment of bulk suppliers, including water boards and Eskom.

Under the reform, the National Treasury is also starting to link funding to the large cities to a stipulation that revenues generated from specific trading services be reinvested into much needed infrastructure to reduce outages and investment backlogs.

Earlier in the year, a R54-billion performance-based grant was unveiled in a bid to increase investments in water, sanitation, electricity and waste infrastructure services by the country's eight metros.

The performance-linked incentive aims to mobilise more than R100-billion in infrastructure investment over the coming six years, with recipient municipalities required to match the infrastructure grants with their own revenues and borrowings.

KfW country director for South Africa Cornelia Tittmann argued that the reforms would improve service delivery and living conditions for millions of South Africans, while AFD regional director for Southern Africa Marie-Hélène Loison said the MTSR programme would contribute to ensuring that the necessary investments in essential urban services were protected and sustained over time.

While Sasol continues to reduce its overall capital expenditure, the JSE-listed group is increasing its investment in its coal mining business to shore up the feedstock needed to raise output at its Secunda Operations to 7.4-million tons, while also reducing external coal purchases.

Production at Secunda Operations in Mpumalanga increased to 7.2-million tons in the year to June 30, a five-year high that helped underpin strong results that were also buoyed by energy market developments after the US and Israel declared war on Iran.

The group reported a 17% rise in earnings before interest, taxes, depreciation and amortisation to R61-billion and a 9% rise in headline earnings per share to R38.31.

The performance at Secunda Operations was supported by improved gasifier availability, the absence of a shutdown, as well as better coal quality following the completion of a coal-destoning project to reduce coal sinks, or impurities.

For the 2027 financial year, when a shutdown is scheduled, Sasol is forecasting output of between 7.2-million and 7.4-million tons, supported by feedstock improvements and increased overall equipment availability.

CEO Simon Baloyi said during a presentation that the implementation of the R1-billion conversion of the Twistdraai export-coal washing plant into a destoning facility had resulted in materially improved coal quality, with sinks of below 12%.

"Looking ahead, we will ensure sustained coal quality while focusing on increasing own coal production, reducing external coal purchases and improving the cost competitiveness of our feedstock," Baloyi said during a results presentation.

He added that an assessment of scenarios to ensure Sasol's long-term coal supply was also progressing and that an update would be provided during the company's 2027 capital markets day.

Executive VP for mining Sandile Siyaya confirmed that Sasol would continue to reduce its purchases of coal from external sources in the coming financial year, having purchased 8.8-million tons in 2026.

External purchases of between five-million and seven-million tons were expected during the 2027 financial year, alongside an increase in own production from the 28.4-million tons produced in 2026.

"We have given guidance of between 30-million and 32-million tons," Siyaya said, reaffirming the goal of supplying 34-million tons from internal collieries by 2028.

Mining-related capital expenditure was also defying the downward trend in the rest of the group over the past three years, rising from R2.9-billion in 2024 to R4.1-billion in 2026, while group-wide capital expenditure fell to R20.9-billion from R25.4-billion in 2025.

Sasol has also lowered its capital expenditure guidance for 2027 from between R27-billion and R29-billion to between R22-billion and R25-billion.

CFO Walt Bruns told Engineering News & Mining Weekly that Sasol Mining was likely to invest between R1-billion and R1.5-billion more in the 2027 financial year than the R4.1-billion invested in the prior year, including in a shaft replacement project.

Coal feedstock is also required to produce the methane-rich gas (MRG) Sasol intends to sell to industrial gas customers, which face a gas supply crunch from 2028 when Sasol halts the supply of natural gas from Mozambique to such customers.

Baloyi described the National Energy Regulator of South Africa's approval of its gas pricing application covering its 2027 financial year and part of 2028 as a "positive step towards enabling the MRG bridge solution".

Nersa approved a maximum gas price of R97.31/GJ for the first quarter of the 2026/27 financial year for end-user customers and R92.44/GJ for traders and resellers.

However, Baloyi said Sasol would not make a final investment decision in relation to the MRG-related investment until there was greater pricing certainty for a longer period.

Bruns indicated that Sasol would need to invest in additional pipeline infrastructure to facilitate the supply of MRG to industrial customers, which cur...

Electricity and Energy Minister Dr Kgosientsho Ramokgopa has indicated that it would be his preference for Eskom chairperson Mteto Nyati to remain in the role beyond his term, which ends in October, while underlining Cabinet's primary role in the decision.

Speaking at Eskom's results presentation, where the utility reported a R30.3-billion profit, the Minister highlighted the positive role that Nyati had played in supporting the State-owned group's operational and financial turnaround, while suggesting that his departure would be premature.

"We know that Eskom has been a poisoned chalice to many that have come before you, but you chose to raise your hand and continue to serve this country.

"And I am confident that also with the Eskom 2.0 that we are building, there can be no better individual who can drive this ship and help us to get to quieter waters.

"We're going through a turbulent phase," Ramokgopa said, referring to the uncertainty being created by the ongoing reform of the electricity sector.

Questioned by Engineering News & Mining Weekly as to whether Ramokgopa would, as shareholder Minister, be making a case in Cabinet for Nyati's continued chairpersonship, he said his view on the matter was clear and in the public domain.

"I'm not shy about it. These are my views," he said, while stressing that there were 30 other Cabinet members who would also have an opportunity to have their say.

"So, what is the point I'm making? It ain't broke . . . If anything, my view, as an individual, is that there's a lot more to be achieved going forward."

The statement follows a period when Nyati's comments about the unbundling of Eskom have drawn strong criticism from Business Leadership South Africa (BLSA) and even a rebuke from the Presidency. Notably his opposition to the transfer of ownership and control of the country's grid assets to a new State-owned Transmission System Operator (TSO) outside of Eskom, which is being set up in line with the Electricity Regulation Amendment Act.

Nyati has since met with both Ramaphosa and BLSA to "discuss the path ahead" and to engage on the "electricity reform programme and the challenges of implementing it" respectively.

Ramaphosa confirmed in a statement that he met Nyati and the Eskom board on Thursday August 27.

The President said government's commitment to establish a fully independent TSO with ownership and control of the transmission assets had been reiterated, as such a restructuring was needed to create a level playing field for competition and unlock investment in the electricity sector.

This was in line with the outcome of the Phase 1 report of the Eskom Restructuring Task Team (ERTT), set up after Ramaphosa used his State of the Nation Address to contradict an earlier Eskom plan for the grid assets to remain under the ownership of the National Transmission Company South Africa (NTCSA), an Eskom subsidiary.

In his own statement, Nyati also endorsed as "the right policy" the position that the TSO owned and controlled the transmission assets.

But he said he had also raised the board's concerns about execution, particularly in relation to "protecting Eskom's financial position, ensuring the TSO can invest in expanding and strengthening the grid, and engaging lenders and funders with transparency and responsibility".

"The President was clear that government will work closely with the board, the NTCSA, and other stakeholders to implement reform in a way that achieves those outcomes," Nyati said, adding that alignment between the shareholder and board was not a courtesy, but a requirement.

Eskom reports that it is aiming to stabilise yearly sales at the 178 TWh level reported in its 2026 financial year, which represented another 6.1% year-on-year fall.

The State-owned utility has recorded an ongoing decline in sales for more than ten years, having reported sales of more than 224 TWh in its 2012 financial year.

Despite the fall in sales, Eskom reported a big rise in profits to R30.3-billion in 2026, from a restated R14-billion in the prior year.

The group reported revenue of R354.7-billion, up from R340.8-billion in 2025, on the back of tariff increases and more stable operations. The latter development also enabled it to reduce its spending on diesel to R7-billion from R18-billion. The figure was above R36-billion two years ago.

The progressive fall in the utility's sales has coincided with steep tariff increases and supply disruptions, which Eskom has since brought under control.

It also coincided with reforms in the electricity market that resulted in large consumers entering into power purchase agreements with independent power producers and traders for electricity, including electricity wheeled through Eskom and municipal networks. Installations of behind-the-meter solar PV have also surged.

Eskom's 2026 sales slump was particularly pronounced among industrial customers, where sales fell by 9.7 TWh, or 22.5% year-on-year; a performance that Eskom attributed largely to a fall in demand from the country's remaining ferrochrome smelters.

The State-owned utility has since extended a 62c/kWh discounted tariff to support the resumption of production by smelters owned by Samancor Chrome and by the Glencore-Merafe Chrome Venture, as well as an undisclosed discounted negotiated pricing agreement with Manganese Metal Company.

Eskom has confirmed that it will not make a profit on these sales, but has argued that the agreements will allow it to cover its variable costs and make a contribution to its fixed costs.

It also insists that standard-tariff customers are not subsidising the sales to the smelters and that the decision to "monetise" its 2 GW to 3 GW surplus to supply the smelters and potentially attract new demand is based on a cost-benefit analysis that points to benefits for Eskom from sustaining the baseload demand in a context of ongoing take-or-pay coal contracts.

The duration of this surplus could hinge partly on the outcome of Eskom's coal decommissioning review.

No update was provided on Eskom's decommissioning schedule, but the utility indicated during the release of its financial results, which were again qualified, that an announcement would be made during the third quarter of 2026.

Part of the qualification of its latest annual financial statements related to the lack of compliance of its coal fleet with air and water quality standards, alongside a finding that its irregular-expenditure disclosure remained incomplete.

DATA CENTRE & CROSS-BORDER SALES IN FOCUS

CEO Dan Marokane indicated that Eskom was assessing various demand retention and growth initiatives to shore up sales, including targeting additional load through data centres, attracting flexible load in the form of a Bitcoin-mining pilot, and rolling out electric vehicle charging infrastructure.

It would also seek to develop South Africa's role as a regional electricity hub to grow export sales. However, international sales during 2026 fell by 1.2 TWh, or 8.3%.

A slide in Eskom's results presentation also stated that, even if customers self-generate or buy from alternative suppliers, Eskom would retain revenue through network charges, customer wheeling and revised tariff structures that separate energy charges from the recovery of fixed costs.

Electricity and Energy Minister Dr Kgosientsho Ramokgopa said the fall in Eskom sales should be seen against the background of the efforts taken under the Energy Action Plan to tackle the loadshedding crisis.

He said it was "common sense" for Eskom's sales to have fallen when that plan included specific...

With the International Trade Administration Commission of South Africa (Itac) having adjusted upwards the dollar-based reference price (DBRP) for sugar imports from $680/t to $785/t this week, industry body SA Canegrowers welcomed the adjustment but sugar manufacturer Illovo Sugar believed the adjustment fell materially short of what was required.

SA Canegrowers' view is that the upward adjustment of the DBRP is critical to the sustainability of the domestic sugar industry, which is contending with a flood of heavily subsidised sugar imports.

SA Canegrowers did caution that while the adjustment is welcome, it may not go far enough to fully close the gap that has allowed a surge of subsidised imports to displace locally produced sugar from the local market, which echoes Illovo's view.

"We thank [government] for listening to the industry and acting on the evidence we have presented over the past two years. This adjustment shows the government understands the severity of the crisis facing sugarcane growers," SA Canegrowers chairperson Higgins Mdluli says.

For context, the DBRP is the benchmark price set in US dollars that underpins South Africa's variable tariff on imported sugar. It had been set at $680/t since 2018. When world sugar prices fall below the reference price, a tariff is applied to make up the difference, so that imports cannot undercut local producers and flood the domestic market.

The lower DBRP had left South Africa open to a surge of imported sugar, with volumes having risen sharply over the past two years. Duty-paid imports for the January to June period rose from just 1 619 t in 2022 to 124 594 t over the same period in 2026 - a more than 70-fold increase in four years.

Over the same period, local sugar sales fell by 35% or 188 000 t. This has happened in just three seasons.

Grower proceeds fell by R1.33-billion largely owing to the export burden of having to sell offshore at a loss. The proportion of saleable sugar the industry is forced to sell offshore at a loss rather than into the domestic market has risen from 22% to 37%.

"We are encouraged that government acted, but we will be watching closely over the coming months to see whether this adjustment translates into a genuine reduction in the volume of imported sugar entering the country," Mdluli states.

DIVERGENT VIEWS Illovo says the DBRP should have been set higher to ensure the necessary protection of the local sugar industry from the continued threat of unsustainably priced foreign imports and inflationary pressure.

"The outcome did not adequately respond to the scale of pressure facing growers, millers and the broader rural economies reliant on the sugar industry," the company states.

Industry body South African Sugar Association (SASA) initially asked Itac in 2024 to increase the DBRP to $905/t, while another industry body, Beverage Association of South Africa (Bevsa) asked for it to be lowered to between $552/t and $680/t in 2025, citing the adverse impact of duties on beverage producers, bottlers and consumers.

Given these divergent positions of prominent stakeholders in the sugar industry, and following extensive engagements between government and industry, Itac decided that a combined valuation of both applications would be the most equitable approach.

Itac confirmed in its investigation that the domestic sugar industry was indeed facing a challenging operating environment characterised by volatile global sugar prices, increasing import penetration and rising production costs. However, beverage producers had also been experiencing rising input and operating costs, although the sector generally maintained positive growth in production, sales and capacity.

Itac found that the DBRP formula remained an appropriate and necessary mechanism for administering the sugar tariff regime.

However, in considering both SASA and Bevsa's applications, Itac deemed that neither party's proposed DBRP would appropriately balance the need to provide adequate and pr...