Government bans sugar exportation as scarcity bites

Saturday August 6 2011

By Andrew Bagala & Ephraim Kasozi

President Yoweri Museveni has announced a ban on the exportation of sugar and allowed the importation of sugar for only six months as an intervention to curb rising prices of sugar in the country.

The President announced the ban yesterday, while touring sugar factories in Jinja and Buikwe districts and in a Television address to the nation.

Although experts insist that the economy is failing, Mr. Museveni insisted that the economy is growing and at a faster rate compared to the past years.

“The government will allow for controlled sugar imports of up to 40,000 tons for six months to address the current scarcity of sugar,” adding that no more sugar exports will be allowed as this has been part of the problem,” a State House statement said.

President Museveni said “Sugar importation will be regulated and controlled and will be stored in bonded warehouses. We should not allow exportation because this has been part of the problem.”

Uganda exported between 275,000 metric tons of sugar in 2010 but the figure nearly doubled in the last six months in 2011.

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The announcement came a day after a two-day cabinet meeting over rising prices of basic commodities that are pushing Ugandans into economic difficulties.

Sugar prices have reached Shs7, 000 from Shs2, 500 in some parts of the country. Government attributes this to drought that ravaged cane-producing areas and speculators.

A price of a bag of sugar has increased from Shs125, 000 to Shs220, 000 in just six months.

According to Mr Museveni those selling sugar at a higher price, “cannot go to heaven and such traders are cheats and should repent if they want to go to heaven.”

The President repeated his blame and accused the opposition politicians of blocking projects that could have prevented the current crisis.

“About exports, I would like to blame two categories of people; some opposition politicians who blocked important projects like construction of dams like Bujagali in Jinja which has delayed shortage of electricity since 2005, construction of sugar factories in Lugazi and Amuru and the ruling National Resisstance Movement MPs who keep quiet when the projects are being blocked,” said Mr Museveni who assured the nation that the economy would soon stabilised in the coming harvest season.

Managers of Kakira sugar factories and Sugar Corporation of Uganda Limited (SCOUL) where the President Visited to assess the gravity of the sugar scarcity, told him that factory prices sugar stand at Shs2,248 and Shs2,240 per Kilogram, for Lugazi and Kakira sugar respectively.

Mr Museveni attributed the current high commodity prices to the imbalance between imports and exports.
He said the high demand for commodity from Uganda by the regional market in DR Congo, Southern Sudan, and Kenya is contributing to the high commodity prices. He was however quick to add that this kind of demand was good for the economy.

“But this is good opportunity for the bigger market and the challenge is for the manufactures and producers to work harder to ensure that enough is produced for both local and outside market.”

He promised to invest in food reserves to stabilize food prices, promote tourism, fish, tea, coffee and fruits growing which would increase the country’s income from exports.

“What we need now is to export then, we import.”

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