Uganda defeats Kenya over sugar surplus row

Wednesday June 15 2016
market001 pix

Trucks loaded with sugarcane park at Mayuge Sugar Industry. It has been established that Uganda produces surplus sugar and is capable of exporting the product to the region. FILE PHOTO

Kampala. After being put to the sword, Uganda now has the last laugh after the findings of an investigation instituted by the Kenyan government found out that the country has indeed been producing surplus sugar for some time now.
According to the chairman of Uganda Sugar Manufacturers Association, Mr Jim Mwine Kabeho, Uganda has been producing surplus sugar since 2013, and the findings by the Kenyan team are not a surprise.

An investigation instituted by the Kenyan government concluded that Uganda has a surplus of 36,000 metric tonnes of sugar, bringing to an end claims that the country’s sugar sub sector is incapable of exporting to the region.
“This surplus was established and confirmed by a verification mission on the Ugandan sugar sector undertaken by Kenyan Government,” a statement issued by the Ministry of Trade on Tuesday said.

Capacity questioned
There has been a long standing debate on whether Uganda has surplus sugar to export to Kenya and other regional markets, with some opposition politicians, mainly in Kenya alleging that Uganda is being used as a ‘transit go-down’ for cheap sugar imported by barons from Brazil.
They also claimed that Kenyan local millers had tonnes of unsold sugar in their stores due to a glut of cheap sugar on their market.
“Consequently, a bilateral meeting of the Kenya-Uganda Joint Trade Committee (JTC) took place in Nairobi on 29th and 30th October, 2015. The meeting agreed, inter alia, that Kenya undertakes a verification mission of the Uganda sugar sector,” reads the statement.

Daily Monitor can also confirm that the verification mission was tasked to determine Uganda’s sugar production, consumption and import and export capacities by country and sugar types.
The mission was also to determine and agree on the sugar delivery schedules and export procedures by Uganda, and as well study the report of the meeting of the Uganda Revenue Authority, Ministry of Trade, Industry and Cooperatives, Uganda Sugar Manufacturers Association, Kenya Revenue Authority and the EAC Secretariat which took place from September 9 to 11, 2015 and agreed on administrative procedures for trade in sugar.
The team conducting the verification mission carried out factory visits from May 23 to 26, 2016 with officials from both Kenya and Uganda.

Members of the Kenyan delegation were drawn from the Ministry of Industry, Trade and Cooperatives (International Trade Directorate), Sugar Directorate, Kenya Revenue Authority, Kenya Sugar Manufacturers Association and a representative of the Kenya High Commission in Kampala.
Uganda’s team was made up of the Ministry of Trade, Industry and Cooperatives, Uganda Revenue Authority and Uganda Sugar Manufacturers Association.
The team visited 11 sugar factories including; Kakira Sugar Works Ltd, Mayuge Sugar Ltd, Kaliro & Allied Industries Ltd, Kamuli Sugar Ltd, and Seven Star Sugar Ltd.

GM Sugar, Uganda Farmers Crop Industries Ltd, SCOUL, Hoima Sugar Ltd, Kinyara Sugar Works Ltd and Ndibulungi Sugar Works were the other factories visited, bringing the total number to 11.
“The Kenyan team collected data on sugar production and sales, made physical observations of sugar stocks in the stores, held discussions with senior factory managers and also held a meeting with Uganda government officials from Ministry of Trade, Uganda Bureau of Statistics and Uganda Revenue Authority,” Trade ministry’s public relation and communication officer, Ms Hadijah Nakakande said.


Registered surpluses
The findings by the Kenyan team, which Daily Monitor has seen, shows, the country has been registering on average surplus sugar of 36,000 metric tonnes (MT) since the year 2014/15.
“In the year 2014, Uganda’s sugar production stood at 400,499.05 MT and out of that consumption was 342,325.14MT. And 84,603.3MT were exported leaving a balance of 26,429.29MT,” Ms Nakakande said.
She continued: “In 2015, Uganda produced 396,315.95MT of sugar and consumption stood at 329,896MT. And 49,810.55MT were exported leaving a balance of 16,604.4MT of sugar.”
Out of the average surplus of 36,000MT, it was agreed that Uganda exports an average of 9000 MT quarterly to the Kenyan market.

According to Trade minister Amelia Kyambadde, the data collected by the verification mission, clearly indicates that Uganda has surplus sugar, expunging all claims that Uganda is used as a conduit to export cheap sugar to Kenya.
She said: “The two countries have agreed to work closely to ensure good trade relations. Subsequent meetings will be held involving all players in the sugar sector.”

The capacity
With the current status of production and more new sugar factories coming up, for instance, the soon-to-be commissioned Atiak Sugar in the north, the country is destined to become the leading sugar exporter in the region.
Last year, Uganda exported 23,899.5MT with South Sudan as the leading importer followed by Rwanda and Kenya.

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