Explore the challenges facing South Africa's sugar, energy, diamonds, and livestock industries as global trade dynamics shift, impacting livelihoods and economic stability.
Image: Bongani Mbatha African News Agency (ANA)
As a comparison, over the same period in 2020, South Africa imported just 20,924 tons, whilst the previous highest level of imports was in 2024 at 55,213 tons for the same period. Every day, there is a new announcement relating to world trade tariffs, mostly emanating from the USA, and thereafter, other countries react. South African import tariff regulations regarding sugar imports were slow to respond to the low world sugar price in 2025, with late adjustments of existing tariffs to offset the low prices of imported sugar. This tariff delay meant that unprecedented amounts of foreign sugar flooded into South Africa.
SA Canegrowers remains concerned about the ongoing reliance on the sugar tax to punish local drinks manufacturers who include sugar in their drinks. When the sugar tax was introduced in 2018, the industry shed more than 16,000 jobs in the first year alone.
2. Another major industry under stress is the energy and chemical sector in which Sasol operates. Sasol’s profits crashed from R7.22 per share to just R0.38 per share in the six months to 31 December 2025. A year ago, the company earned R7.22 per share, which equates to a 95% drop. Turnover of R112.4 billion remained flat compared to the prior period, which was supported by a 3% increase in sales volumes, despite the softer macro environment. Considering the constant threat to oil supplies due to the Middle East tensions, one can expect a significant drop in crude oil prices should there be a solution to the Iran/USA standoff, in which case that may add to pressure on the Sasol share price.
Natural gas is piped by SASOL from onshore gas fields from Temane, Mozambique by means of an 864 km pipeline (26” diameter) to Secunda at 124 bars. From Secunda, the pressure is stepped down, and natural gas is odourised, entering the Gauteng network at Nigel. Methane-rich gas is produced in Secunda and piped to Richards Bay and then down to Durban South.
After last week's 15% share price gain to R141, the stock trades at a forward P/E ratio of 5x.
3. One old-time favourite share that formed the traditional cornerstone in investment portfolios was De Beers. The company, for a long time Africa’s largest diamond miner, posted a sharply wider $511 million (R8,2 billion) loss in 2025 as weak Chinese demand, U.S. tariff pressures, and softer global prices weighed on its worldwide operations, including key mines in Botswana, Namibia, and South Africa. Total rough diamond production fell by 12% to 21.7 million carats as the company adjusted to lower demand and higher inventories.
The company stated that this was due to weak prices, softer Chinese demand, and competition from lab-grown diamonds. In Botswana, operations are conducted through the Debswana joint venture, where Jwaneng, widely regarded as the world’s most valuable diamond mine by revenue, and Orapa remain core contributors to output. Botswana is heavily reliant on diamond revenues for fiscal income and foreign exchange; therefor sustained price weakness carries broader economic implications.
4. It is well known that worldwide, an increase of 50 to 70% in food productivity will be required to feed nine billion people by 2050. It is estimated that livestock provides about 26% of protein for human consumption and 13% of total calories. It is also estimated that the demand for livestock products will more than double during the next 20 years, due to the level of urbanisation, economic growth, and changes in consumption patterns in developing countries.
In developing countries, the livestock sector represents close to 1 billion smallholder livestock producers and contributes 40% of agricultural GDP and between 2 and more than 33% of household incomes. In South Africa, beef production is characterised by its dual nature. On the one hand, there is a commercialised, formal, mature, and sophisticated sector, which is contrasted on the other hand by a developing, non-commercial, informal sector.
Foot and mouth disease has been declared a national disaster in South Africa. FMD is caused by a virus that, as with the COVID-19 virus, is spread in several ways. The most important confirmed route of transmission is by contact introduction. Farmers buy and bring an infected animal onto their farms or into their herds or flocks. Antibiotics do not kill viruses; there are no registered medications available in South Africa that can claim effectiveness against FMD. The table below contains the total number of livestock in the various provinces. The total number exceeds 12 million heads of cattle. Our herd is well below other large herds.
5. Beef consumption in Asia has grown by over 11,8% (2,7m tons) over the past five years and is expected to increase by another 1.7 million tons cwe (carcass weight equivalent) to 22.4m tons cwe (carcass weight equivalent) by 2030. This growth is explained by increased consumption in China, India, and Pakistan. Except for Europe, consumption is expected to increase in all regions in 2025. Africa will see the largest gains in consumption, increasing by 170 000 tons cwe (2.3%) (OECD-FAO, 2024).
According to RIMIS (Red Meat Industries Report dated December 2024, ANIMAL DISEASES), there have been severe and sporadic outbreaks of FMD since 2019, with South Africa losing its official FMD-free status from the OIE, negatively affecting cattle, beef, sheep, and wool exports (NAHF, 2024). Since 2021, there have been 288 outbreaks of FMD in South Africa’s previously FMD-free zone, with KwaZulu-Natal contributing to 154 of these outbreaks. The most recent outbreaks have taken place in the Eastern Cape, mostly in dairy cattle – the latest outbreak started on July 9, 2024 (DALRRD, 2024).”
The Minister of Agriculture, John Steenhuisen, has announced that the first batch of one million high-potency vaccine doses from Biogénesis Bagó in Argentina is scheduled to arrive in South Africa last weekend. This shipment is the first phase of a broader agreement, with a further five million doses set to follow in March.
South Africa is currently experiencing a bad patch of large economic setbacks that affect a wide range of the population as jobs come under pressure.
* Kruger is an independent analyst.
** The views expressed herein are not necessarily those of Personal Finance or Independent Newspapers.
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