Sugarcane prices drop by Shs65,000 in Busoga

A truck carrying sugarcane in Jinja recently. PHOTO/TAUSI NAKATO

What you need to know:

  • Raw cane is largely used for making sugar. However, Mr Mombwe says the millers use it in the manufacture of other products like biogas, molasses, and fertilisers.

Sugar millers in Busoga Sub-region are currently buying raw cane from farmers at between Shs175,000 and Shs215,000 per tonne, which is the latest drop in prices over the past seven years.

Since 2017, farmers have been frustrated by the millers’ offer of Shs175,000 per tonne, which further dropped to Shs96,000 in 2021, before jumping to Shs240,000 in 2023 and further dropping by Shs65,000.

Mr Godfrey Naitema, one of the farmers, says he doesn’t see the reason why millers reduce sugarcane prices, and described the Shs65,000 drop as “unfair” and “unacceptable” because they are servicing loans.

“Investing in growing sugarcane is too expensive in terms of buying seedlings and renting land yet we get little profits,” Mr Naitema said in an interview on Tuesday.

The General Secretary Busoga Sugarcane Out growers Association, Mr David Christopher Mombwe, said a drop in sugarcane prices is a sign of “exploiting farmers”.

He said: “All the years I have been in the sugarcane business, it is only profitable to millers. We are being exploited. Millers always reduce sugarcane prices when children are resuming their studies, and after two months, the prices will go up.”

Mr Mombwe wants the government to set a minimum price of Shs250,000 per tonne  sugarcane, which he said would stablise the price.
“Even if the millers buy the sugarcane at Shs250,000, they can still get profits,” he said.

Raw cane is largely used for making sugar. However, Mr Mombwe says the millers use it in the manufacture of other products like biogas, molasses, and fertilisers.

The Chairperson of Uganda Sugarcane growers Association, (USGA), Mr Isa Budhugo, however, says reducing prices of sugarcane because of a drop in prices of sugar is not plausible.

“They have reduced their price to below what we are spending; the breakeven point of a sugarcane farmer is Shs210,000, the banks are likely to confiscate our properties if we are paid less than that,’’ he said.

He further warned that they will halt the supply of sugarcane to millers for 30 days as prices stabilise.

The Chairperson of Uganda Sugar Manufacturers Association, Mr Jim Kabeho, argued that the reduction in sugarcane prices is due to the reduction in sugar prices, adding that when the prices for sugar dropped, that of sugarcane, as an input, also went down.

“A kilogramme of sugar currently costs Shs5,000, up from Shs5,500,’’ Mr Kabeho said, adding that the reduction in the price of sugarcane is due to excess sugar that is being illegally imported from Kenya.

According to Mr Kabeho, there is too much cheap sugar being imported into the country through the eastern Uganda porous border points.
“Consumption of our sugar is very low; so, once its prices go down, cane prices will also be at risk,’’ he said.

Mr Kabeho further explained that currently, some factories are undertaking their annual refurbishment of machines and have to break off for one-and-a-half months, which has led to low production.

This comes after cane farmers in Masindi District under their umbrella Masindi Sugarcane Out-Growers Association (MASGAL) decided to suspend the supply of sugarcane to Kinyara Sugar Company Limited until further notice.
The farmers’ decision comes in response to Kinyara Sugar Company’s recent unilateral decision to decrease the price for each tonne of supplied sugarcane from Shs181,000 to Shs160,000 with effect from January 25.