Uganda is now a surplus producer of sugar. Ministry of Trade statistics show that Uganda produces 510,000 tonnes of sugar. Of these, only 360,000 tonnes are consumed locally. The surplus of 150,000 tonnes is exported within East Africa, Comesa and DR Congo.
Two weeks ago, Kenya’s Agriculture Cabinet Secretary Peter Munya banned sugar imports and revoked all the import permits some of which were held by Ugandan manufacturers. Now that Kenya, a key trade partner, has locked out Uganda’s sugar, it means there is no market for more than 35,000 tonnes.
Uganda, according to the Uganda Sugar Manufacturers Association, is currently struggling with stockpiles of about 150,000 tonnes of sugar with Tanzania having previously banned exports from Uganda.
Bank of Uganda statistics show that Uganda earns $98.92m (Shs370b) annually from sugar exports.
The ban on Uganda’s sugar imports has also led to a drop in sugar price. A 50kg bag of sugar now costs Shs130,000 down from Shs150,000 three months ago. As long as sugar farming becomes unprofitable, farmers will be forced to quit growing sugarcane altogether. This crisis, if not addressed, will push more sugar farmers out of business.
With such back and forth trade disputes, one wonders what happened to the regional spirit of East African Community, where partner States should trade seamlessly among themselves. It seems agreements are made only on paper without proper enforcement plan.
It is increasingly looks like EAC member States prefer implementing measures that run counter to their regional integration obligations as they pursue their national industrial policy objectives. Kenya could be more interested in protecting their domestic industries from imports as they seek their development.
It is high time Government of Uganda found a lasting solution to the challenges facing the country’s sugar industry. Sugarcane, which is a perishable produce, requires processing within 30-36 hours after harvest as it deteriorates fast due to bacterial action. This means transporting sugarcane for long distances and its stay for many hours without processing makes no economic sense.
Currently, the challenge is that there is excess sugarcane from the outgrowers, but the sugar mills are not able to take and process all the cane supplied. As such, there is urgent need to make farmers know why there is excess sugarcane, especially from the outgrowers. They should also be informed why the sugar mills are not able to process the canes they supply.