Sweet music for farmers as sugarcane prices double

A truck carrying sugarcane in Jinja. PHOTO/TAUSI NAKATO

What you need to know:

  • Outgrowers  are celebrating after milling factories increased the purchase price per tonne.

Sugarcane farmers in Jinja City are rejoicing after the purchase price of raw cane more than doubled in the past year. 

The prices rose from Shs102,000 per tonne in January 2022 to Shs220,000 per tonne at the moment.

The development is good news to the farmers who complained about low prices of raw cane for the past six years. 

In 2017, the millers were buying a tonne of raw cane at Shs175,000 before cutting the price to Shs96,000 per tonne in 2021.

The current Shs220,000 is the highest purchase price in six years.

Mr Abubakali Omboko, the chairperson of Busoga Sugarcane Outgrowers’ Association, attributed the high purchase prices to shortage of sugarcane.

“For the last three years, Kakira Sugar Works Limited had stopped giving out seed cane and fertilisers to farmers, which forced many out of business and caused shortage of cane. When demand is higher than supply, automatically the prices increase,’’ Mr Omboko said on Monday.

But Mr Omboko said farmers have started receiving seed cane from banks through Kakira Sugar Works Limited. 

“Previously, Kakira Sugar factory was providing seed cane and fertilisers, but it is currently paying a farmer in the bank, whereby the farmer receives the seed cane and the bank debits the money,’’ Mr Omboko said.

He, however, said most farmers are harvesting immature sugarcane due to its high demand.
“Farmers are harvesting sugarcane at nine months yet it is supposed to be between 15 and 18 months,’’ he said.

Mr Hassan Ssembera, a sugarcane farmer, said he is happy with the increase in the purchase price of raw cane because he can now pay university school fees for his children and build a house unlike before when the millers were paying Shs96,000 per tonne.

Mr Godfrey Naitema, another farmer, however, urged the millers to increase the purchase price of cane to Shs250,000 because farmers invest a lot of money in the production process, including hiring land and buying seedlings. 

Mr Jim Mwine Kabeho, the chairperson of Uganda Sugar Manufacturers’ Association, said the factories might close soon due to shortage of sugarcane, a major raw material.

“There is no sugarcane and whenever there is a shortage, we operate under losses; the purchase prices have to increase lest we close,’’ Mr Kabeho said, calling for an organised system for the sustainability of the industry.

The farmers supply raw cane to six factories in Busoga Sub-region, including Kakira Sugar Works Limited, Kamuli Sugar Ltd and Kaliro Sugar Ltd.