Traders post losses as Kenya bans Uganda’s sugar imports
Posted Wednesday, February 27 2013 at 02:00
Why slump? The slump in sugar trade is attributed to an artificial shortage that Kenya has created within its market to raise prices during the elections.
Ugandan sugar traders are the hardest hit following Kenya’s ban imposed on the commodity’s imports.
The ban imposed last December, has seen the commodity’s movement slow down, resulting into stock piles, forcing the traders to sell sugar at a ‘give-away’ price.
The manufacturers have attributed the slump in sugar trade to an artificial shortage that Kenya has created within its market to raise prices during the elections; thereby, denying Uganda the market.
Uganda National Chamber of Commerce and Industry vice chairman Sudeep Mohanty, says Kenya is setting a bad precedent for the East African Common market where goods and services are supposed to move freely. By starting
with the ban on sugar, it implies that the same act could move to other commodities and Uganda may be forced to act like Zambia did when Kenya stopped sugar imports from there.
“Manufacturers export mainly because the local demand exceeds the supply and maybe farmers and manufacturers have expanded their farms and production plants. So, denying them the market is killing their businesses,” he said yesterday.
Last December, sugar manufacturers from Uganda, Kenya and Tanzania were forced to convene a crisis meeting at the Kenya Sugar Board offices in Nairobi when Kenya blocked sugar imports from Uganda and Tanzania from her market accusing them of dumping cheap sugar suspected to have been imported in excess when the two countries were allowed to import tax free sugar the Common Market for East and Southern Africa (Comesa) arrangement to stabilise domestic needs in 2011.
Following the meeting that relaxed the ban, the traders are now accusing Kenya Revenue Authority of impounding 20 trucks of sugar loaded with close to 250,000 metric tonnes of sugar at Busia border.
“We have sugar in the factories and traders are complaining about slow movement of stocks. We have been forced to cut our factory prices from Shs150,000 previously to Shs135,000,” said Mr Jim Kabeho, the chairman Uganda Sugar technologies association in an interview.
Following the outcry, the sugar manufacturers are calling upon government to take action because soon other commodities could be affected.
“ Kenya has a domestic sugar shortage of 350,000 metric tonnes which we would have met. Why don’t they allow us access this market?” Mr Mohanty wondered.