Busoga sugarcane farmers excited as millers hike price

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Sugarcane farmers in Busoga Sub-region have reason to smile after millers hiked the purchase price of raw cane for the first time in five years.
The farmers have since 2017 been frustrated by the millers’ offer of Shs175,000 per tonne of raw cane, which further dropped to Shs96,000 in 2021.
The price has gone up by Shs6,000, pushing a tonne to Shs102,000, the spokesperson of Busoga Sugarcane Out-growers Association, Mr Godfrey Naitema, said in an interview on Tuesday.

Mr Naitema said the price increment was communicated to them by the millers operating within Busoga Sub-region.
The sub-region has six sugar-processing factories which include Kakira Sugar Works, Mayuge Sugar, Kamuli Sugar Ltd, Kaliro Sugar Ltd, GM Sugar Factory, and Bugiri Sugar Ltd.
“The new price for sugarcane takes immediate effect and this is what the farmers have been yearning for because they have been operating under losses,’’ Mr Naitema said.

He added that they petitioned the millers, requesting for the hike because sugarcane products are sold at high prices yet raw materials are bought at low prices.
“We petitioned the millers requesting them to increase the purchase prices so that we can sustain the production capacity of cane. We asked to have the price increased to between Shs120,000 and Shs150,000 per tonne to enable us sustain the industry,’’ he said.
Mr Naitema said most of the cane had dried up in the gardens because their supply was higher than demand and the millers’ crushing capacity was very low.

Mr Naitema, however, now fears the industry is likely to face a shortage of cane because many farmers have abandoned the business after failing to get profits.
“Only large scale farmers have remained in the business while those who had been lured into it by the high profit margins in 2017 have shunned it,’’ he said.
The chairperson of Uganda Sugar Manufacturers’ Association, Mr Jim Kabeho, attributed the rise in sugarcane purchase to an increase in fuel prices and surge in demand, which he said has surpassed supply.

“Due to an increase in fuel prices, the farmers couldn’t cope and had to increase the sugarcane purchase price to cater for the increase in fuel. Since the price of fuel has increased by 30 percent, we have increased by about 10 percent,” Mr Kabeho said.
He added: “Also, many sugar-processing factories are coming up in the sub-region which has increased the demand for cane. We are buying cane at over Shs100,000 per tonne.” 

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In September last year, government pledged Shs135b for the construction of two farmer-owned sugar processing plants in Luuka and Buyende districts, with an aim of reducing the challenge of excess raw cane within the sub-region, which had led to a drop in their prices.
Following a significant drop in prices, farmers were compelled to sell their cane to Kenya, but this did not work out after their Kenyan counterparts protested the move.

The farmers then opted to sell their cane to Atiak Sugar Factory in Amuru District, but most of them were hindered by the high transport costs and lack of well-conditioned vehicles.