Sugarcane prices drop by Shs110,000 in Busoga

Workers load sugarcane on a truck in Jinja District in May 2024. PHOTO/TAUSI NAKATO

What you need to know:

  • Since 2017, the millers started offering Shs175,000 per tonne of raw cane to farmers, which further dropped to Shs96,000 in 2021, regained last year and now dropped. 

For the last seven years, the Busoga Sub-region has experienced fluctuation in sugarcane prices which has greatly affected the sugar industry.

But last year, farmers rejoiced after the purchase prices of sugarcane shot up to Shs240,000 per tonne. Those smiles were short-lived and have continued fading every month due to the continuous reduction of prices, now at Shs130,000. 

Since 2017, the millers started offering Shs175,000 per tonne of raw cane to farmers, which further dropped to Shs96,000 in 2021, regained last year and now dropped. 

In January this year, it dropped as low as Shs65,000 per tonne. Millers are now buying sugarcane between Shs130,000 and Shs135,000 per tonne, threatening to kick farmers out of business.

Mr Gofrey Naitema, one of the sugarcane farmers, on Monday said farmers cannot break even with Shs130,000 per tonne.

“I ask all the sugarcane farmers to follow the world market price of Shs190,000. Millers are cheating farmers if they buy sugarcane at Shs130,000 because they can’t break even. Millers will kill the sugar industry because farmers will abandon cane growing,” he said.

Mr Naitema further said farmers have failed to clear the loans they secured because of the low profits. 

“We invest a lot of money in growing sugarcane including expenses for seedlings and renting land. We have failed to clear the loans because of the relatively low profits,” he said.

The General Secretary of Busoga Sugarcane Outgrowers Association,  Mr David Christopher Mombwe,  said some millers have used the opportunity of Kakira sugar factory closure of production for 30 days to reduce the purchase prices of sugarcane. 

“Mayuge, GM and Kamuli sugar factories are buying at Shs135,000. That is shortly after Kakira temporarily closed for maintenance when it was buying raw cane at Shs165,000. These millers are taking that advantage to rob farmers. Sadly, the government has paid a deaf ear to all this exploitation,” he said.

Mr Mombwe added that Ugandan sugar is in high demand in Kenya but the millers are still buying raw cane from farmers at very low prices.

“There is a big market for Uganda sugar. In Kenya, a kilogramme of sugar is at Shs5,500. They are getting a lot of money yet in Uganda, it is at Shs4,000,” he said.

Mr Mombwe urged the government to regulate the millers not to exploit the farmers.

“Millers are taking advantage of farmers. The cost of production is very high because we buy herbicides, which are taxed. We also buy hoes and seedlings but millers don’t care. We are not happy,’’ he said.

The Chairperson of Uganda Sugarcane Outgrowers Association, Mr Isa Budhugo, advised farmers to halt the supply of sugarcane to the millers until they have increased the prices.

“This is an unfair price of sugarcane. The only solution is for farmers to stop supplying sugarcane to millers until they buy the cane at a reasonable amount of money,” he said.

The Chairman of Uganda Sugar Manufacturers’ Association, Mr Jim Kabeho, attributed the reduction in the purchase prices of sugarcane to the drop in the sugar prices.

“The price of sugarcane will fall when sugar prices go down. When sugar prices increase, cane will also shoot up,’’ he said.

Mr Kabeho also cited lack of regulation in the sugar industry as the main cause for uncertainties in cane prices.

“As long as we continue for 20 years without regulation in the sector, we shall remain with fluctuations in prices. Imagine the government recently commissioned another sugar factory in Busoga Sub-region, Bbaale Sugar Works Limited, to compete with excisting ones,” he said.

According to a study by Economic Policy Research Centre released in 2021, eastern Uganda, particularly Busoga Sub-region, had the largest sugarcane milling capacity at 35 percent, followed by central Uganda at 27 percent, western at 26 percent and northern Uganda at 12 percent.