Unrest in KZN cost sugar industry R84 million in losses after damage to 500,000 tons of cane
- The sugar industry has lost R84.5 million due to cane damaged in the KwaZulu-Natal unrest and rioting.
- More than 500,000 tons of cane were burned and damaged.
- Now sugar mills are rejecting damaged canes, costing the industry millions.
- For more stories, go to www.BusinessInsider.co.za.
The South African sugar industry has lost more than R84 million after hundreds of thousands of tons of canes were damaged in arson attacks during the rioting and unrest in KwaZulu-Natal last month, the South African Canegrowers Association said on Tuesday.
More than 500,000 tons of sugar cane were burned during the unrest. Most of it now can't be processed as a result of the damage. Mills in Kwa-Zulu-Natal have not taken in cane due to burning damage.
Since the unrest, 135,222 tons of damaged cane amounting to more than R84,5 million have been turned down at mills. At the height of the unrest last month, the association estimated that cane growers could lose as much as R300 million if mills could not crush the 500,000 tons of cane burnt in arson attacks.
"These fears are now materialising," Andrew Russell, chairman of the South African Canegrowers Association, said.
Last month, riots and looting flared up in mostly in KwaZulu-Natal, one of South Africa's key sugar producing provinces, and some parts of Gauteng, causing major damage to businesses, infrastructure and property.
The unrest is a further blow to the industry, whose woes are compounded by severe droughts, cheap imports, and the sugar tax. The industry fears the the fallout of the unrest has the potential to cripple the industry.
Knock to small-scale growers
The mills refusal to process the 135,222 tons in damaged cane is a blow to the development of the industry. Of this figure, about a fourth, or 38,000 tons, belongs to small-scale growers, many of whom are uninsured and whose chances of recovering from the revenue losses are slim.
For now, it looks like they will not be getting aid from the state.
"While many await relief from fire insurance co-operative, Grocane, and the South African Special Risk Insurance Association (SASRIA), they [the growers] have also been notified that all cane that was burnt prior to mill closures will not be covered by these entities, even though many mills only closed down after a large amount of cane had already been targeted by arsonists," SA Canegrowers said.
The association is now requesting financial aid from several government entities for cane growers who have been severely affected by the riots. It has approached the Department of Trade, Industry, and Competition, the National Agricultural Marketing Council, the Agro Funding Unit of the Industrial Development Corporation, and the Parliamentary Portfolio Committee on Agriculture, Land Reform, and Rural Development.
The association has been conducting oversight visits conducted by the Parliamentary Portfolio Committee last week, which shed light on the scale of the damage in KwaZulu-Natal. It has also been meeting with the IDC to discuss possible bridging finance for affected growers.
The association said that the financial intervention would reduce the impact felt by growers and enable them to stay afloat, continue operations, and retain workers.
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