Sugar millers raise price of cane amid scarcity

Lorries loaded with sugarcane in the parking yard at Scoul on January 11. PHOTO/DENIS SSEBWAMI

What you need to know:

  • The farmers have since 2018 been frustrated by the Shs120,000 per tonne of raw cane which further dropped to Shs102,000 last year.

Sugar millers in Buikwe, Kayunga and Mukono districts have increased the price of sugarcane amid scarcity of the raw material.
The farmers have since 2018 been frustrated by the Shs120,000 per tonne of raw cane which further dropped to Shs102,000 last year.

The price has since increased to Shs167,000 or Shs170,000  depending on the factory that is buying the raw cane.
Some of the millers operating in the area include Sugar Corporation of Uganda (Scoul) and GM Sugar Uganda Ltd.
Mr Julius Katereevu, the chairperson of Mukono Sugar Cane Out Growers Association, said although the new price is a big boost, it has come at a time when some farmers have already abandoned the crop.

“We are happy that the price has gone up, we have been making losses for many years, which even forced some our colleagues to quit the business,” he said last week. 
Mr Davis Bwengye, a transporter and sugarcane farmer, said the new price has come at a time when farmers lack enough cane, which will affect their profit margins.

He urged the government to prevail over middlemen who operate an extortionist cartel permit system where they pay more than Shs1m to get clearance to supply cane to the millers. 
“Getting a permit to supply cane is still difficult. But even after getting it, transporting the cane to the factory is costly because of the high fuel prices,” he said. 
Mr Bernard Mutale, the manager in charge of out growers at GM Sugar Uganda Ltd, said the increment aims at attracting both farmers and transporters.
“Since we lack enough cane, we are paying more money per tonne to attract suppliers. However, when the situation normalises, we shall revert to the old rates,” he said. 
In January, a section of sugar cane outgrowers and transporters in the three districts temporarily suspended supply of cane to Scoul complaining of low sugarcane prices and delays to offload trucks at the factory. 
They claimed that the cost of production in terms of fertilisers, cultivation, and transportation of cane from plantations to the factory was higher than the payments they receive.
The situation was exacerbated by the rising fuel prices, but the factory managers had refused to look into their issues.
However, the managers at Scoul later convinced the farmers to call off the strike and initiated fresh negotiations with their leaders which culminated in the new rates.

In 2018, the cane price had plummeted from Shs180,000 to Shs120,000 per tonne. 
If further dropped to Shs110,000 in 2019.The prices then fell on two other occasions ,both in July 2021. First they fell from Shs110,000 to Shs104,000 per tonne before dipping to Shs99,000. In January, the price increased to Shs102,000 per tonne.