Monday February 4 2013

Low production keeps sugar prices up

The 2011 sugar crisis saw the price reaching Shs15,000 for a kilogramme.

The 2011 sugar crisis saw the price reaching Shs15,000 for a kilogramme. PHOTO BY FAISWAL KASIRYE 


Unless local sugar production capacity is increased, consumers will continue paying high prices for the commodity. This comes after the operational sugar companies such as Lugazi, Kakira and Kinyara among others, failed to meet the 2012 sugar production forecast.

Information from Uganda Sugar Cane Technologists Association (USCTA) indicates that the country produced 289,665 tonnes of raw sugar in 2012 compared to the 327,075 tonnes forecast for the same year. This was, however, higher than the 259,413 tonnes produced in 2011.

According to Mr Jim Kabeho, the chairman of USCTA, sugar production this year will increase since all the producers are operational.
“The production for last year was affected by one of the main firms shutting down for repairs. We expect all the producers to have full capacity this year. This will keep prices stable for the market,” Mr Kabeho said.

Today, sugar goes for between Shs3,000 and 4,500 depending on the place you buy it from - prices that are relatively high compared to the Shs2,200 it used to cost two years back.

Mr Everest Kayondo, the chairman Kampala City Traders Association (KACITA) said the price is a reflection of the actual market situation.

Mr Kayondo said: “For as long as our production stays down, the prices will remain the way they are. We still import sugar with several costs involved at the border.”

In 2011, Uganda experienced a disturbing sugar crisis that saw sugar prices increase to as high as Shs15,000 for a kilogramme. Last year, the government blocked the establishment of Shs96 billion Tirupati investments sugar project in Nakasongola District, saying it would displace hundreds of residents.

On the other hand, government’s suggestions to offer several hectares of land in Amuru district and part of Mabira forest to sugar investors to increase local production continue to be resisted.

New factory
Nonetheless, media reports indicate that Alam Group plans to open a $52 million sugar factory in April this year with production capacity of 60,000 tonnes of sugar annually.