Johannesburg - A loss of R723 million in 2023 due to load shedding is what SA Canegrowers' data says will happen to the South African sugar industry this year.
SA Cranegrowers said that with milling giant Tongaat Hulett in business rescue and the destructive Health Promotion Levy already hampering the industry, these losses are potentially catastrophic for growers and the industry’s workers.
"SA Canegrowers is therefore appealing to the government to put in place short-term measures to mitigate the impact of load shedding on growers while long-term solutions are considered.
"Load shedding affects 1 135 irrigated growers who employ more than 10 000 workers. An estimated 34% of South Africa’s sugar cane is produced in irrigated areas, including Komatipoort and Malelane in Mpumalanga and Pongola in KwaZulu-Natal," SA Canegrowers said.
Chairperson of SA Canegrowers, Andrew Russell said that growers are expected to incur more than R189 million in additional energy costs in 2023 on account of the disruption to irrigation schedules.
"Most irrigated growers in KwaZulu-Natal and Mpumalanga operate on a Ruraflex system, which allows them to pay a lower tariff for operating during low demand times. But the converse also applies: growers pay a significantly higher rate for pumping during peak demand times. As a result of load shedding, growers have been forced to irrigate whenever electricity is available, regardless of demand," said Russell.
Russell said that in addition to the increased cost of energy, growers also face yield losses as they have fewer hours of continuous energy supply.
He said that growers need a minimum of six hours of continuous energy for proper irrigation. As a result of the interrupted power supply, which disrupts irrigation, irrigated growers will lose up to 40% of their water capacity.
"The resulting loss of yield could amount to more than R723 million.
"SA Canegrowers’ scenario modelling shows that continuous load shedding at stages 4-6 will cost growers more than R723 million in 2023. An escalation to stages 6–8 could cost the industry more than R1.8 billion. Anything beyond stage 8 could cost the industry more than R2.4 billion," added Russell.
Russell said that SA Canegrowers is therefore appealing to Eskom and the government to help the industry in particular, as well as the broader agricultural sector, find urgent solutions to mitigate the impact of load shedding.
"Some of the short-term measures SA Canegrowers has asked the government to consider include restricting load shedding to stage 4 in irrigated cane growing areas during peak watering season; providing diesel rebates for growers utilising generators; and tax rebates for those investing in alternative energy sources," he said.
Russell said they will continue to engage with all industry stakeholders as they work to save the one million livelihoods that the sugar industry supports.
The Star