Sugar stockpiles to grow as exports are locked out

Sugar stockpiles have increased as Uganda continues to engage regional markets to open up their markets to the commodity.
This comes amid an expected increase in production which is expected to peak to about 500,000 tonnes before the end of this year up from last year’s 450,000 tonnes.

The increase is expected to create a surplus of 150,000 of stockpiles given that Uganda currently can only export to Kenya, which takes less than 90,000 tonnes.

Export efforts have been curtailed by trade and political challenges, with much of the country’s sugar locked out from regional markets.

Mr Jimmy Kabeho, the Uganda Sugar Manufacturers Association chairman told Daily Monitor yesterday the increase in production it likely to create surpluses yet there are hiccups in the export market.

“We expect to export this surplus of about 150,000 tonnes our neighboring countries but we still have challenges to enter these markets,” he said, noting that the closure of the Rwanda-Uganda Border Katuna, the insecurity in South Sudan, the poor infrastructure in DR Congo and Tanzania’s non-committal to open its market to Uganda’s sugar continue to be some of the biggest challenges.

Kenya is the only market which currently imports Uganda’s sugar. However, according to Mr Kabeho because Ugandan exporters have to obtain export permits to enter the market increasing volumes is still a problem.

“Kenya has a big shortage, which can consume our surplus for one month. However, this market is still affected because producers have to be issued with permits,” he said.

In March, while meeting his Kenyan counterpart Uhuru Kenyatta, President Museveni signed a deal in which Uganda would export between 36,000 and 90,000 tonnes of sugar to Kenya. However, this is yet to be achieved.

Earlier in January, Tanzania had cleared importation of Uganda’s sugar after a meeting between the two countries’ ministers of trade but that market is still closed to Ugandan exporters.
Tanzania continues to lock out Uganda’s sugar claiming that it is imported sugar which is repackaged before it is re-exported.

Uganda’s biggest sugar producer remains Kakira Sugar Works with an annual production of 180,000 tonnes. Kinyara Sugar Works produces 120,000 tonnes while Scoul produces about 100,000.

According to Kabeho, Uganda would be able to supply all its surplus to Kenya but dealers are issued with a limited number of permits that only allow in between 36,000 and 90,000 tonnes.

“Despite this, we are grateful to Kenya because it’s the only access market we have for our sugar,” he said, noting that they are continuously engaging Kenya to increase on the quantities it currently takes.

With prospects of exporting to Tanzania, Kabeho said that during their Dar es Salaam bilateral meeting in June this year, the Tanzania government had promised to give Uganda feedback by the end of this month.

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