Sugar price drops as Shilling continues to appreciate

Thursday May 5 2016

sugar

A consumer puts sugar in a cup to prepare tea. FILE PHOTO 

By Dorothy Nakaweesi

Kampala.

Ugandans are beginning to benefit from the value of the appreciating Shilling after a drop in sugar prices.
A survey across the market indicates a 15-20 per cent drop in the prices of sugar at the factory level.
In an interview with Daily Monitor, the country’s biggest sugar producer Kakira Sugar Works’ corporate marketing manager, Mr Raju Sareen, confirmed the drop in the prices saying: “Consumers should be happy about this news.”
Mr Sareen said at Kakira, the price of each 50-kilogramme bag of sugar now costs Shs130,000 down from Shs140,000 it traded earlier in the year.
He attributes the price change to several reasons.
He said one of the reasons for the drop in sugar prices is the fuel prices which have also gone down to about Shs3,100 per litre of petrol and Shs2,350 for diesel.
“This means the cost of transport has also gone down which has helped us to sell sugar at lower prices,” Sareen explained.
He said the appreciation of the Shilling, which is currently trading in the range of 3,300/3,310 down from the highs of 3,600/3,610, is the other reason for the drop in the price of sugar.
The other reason market players attribute to the prices of sugar dropping, is the unstable condition in South Sudan, which was Uganda’s leading sugar export destination.
Sareen shares: “South Sudan has been unstable and inflow of customers who used to import products like sugar has since reduced. This means more surplus sugar for the Ugandan market.”
Players further say the country is now experiencing increased production of sugar as new players are coming on board. This, coupled with operators upgrading their factories, means more production, which is enough for the local market and for export.
Retail shops have also seen the price of sugar come down to between Shs3, 200 and Shs2,600 depending on packaging and location.
Consumers have welcomed the drop in prices.
Mr Henry Kimera, the executive secretary of Consumer Education Trust, a consumer protection organisation, said: “It is a positive initiative in general (because) consumers will access sugar. However, the challenge is when factories go for repairs, prices shoot up. I think this is a short spell for consumers to celebrate.”

Reason
We do import a lot of raw materials and when the Shilling gets stronger it means the cost of importation has to go down and because of this we had to adjust the price too - Sareen.

dnakaweesi@ug.nationmedia.com

Advertisement