Two sugar factories face closure in Busoga
A sugarcane truck in Jinja City, Busoga Sub-region. As of January 4, 2023, there is shortage of cane which has forced millers to operate below capacity PHOTO/TAUSI NAKATO
What you need to know:
- Authorities say licensing many factories in one sub-region has caused an unstable supply of cane in the area.
The Uganda Sugar Manufacturers Association (USMA) wants the licences of Shakti Sugar and Bon Sugar Mill Ltd (C.N Sugar Ltd), located in Kamuli and Bugiri districts, closed- accusing the firms of being in direct contravention of the Sugar Policy.
Since the enforcement of the Sugar Act, the Ministry of Trade has licensed seven millers including Shakti Sugar Limited, Bon Sugar Limited, Modern Agri Sugar Ltd, Kikajo Sugar Ltd, Kelon Sugar Ltd and Tyrol Investments Ltd.
While delivering his Christmas message on December 22, President Museveni condemned the decision.
“The Ministry of Trade licenced many factories even without sugarcane…why licence a factory without sugarcane?’’ he asked.
Earlier, on April 28, 2020, the Ugandan leader signed the Sugar Act into law, after some Members of Parliament, especially those from Busoga Sub-region, rejected the issue of zoning.
Zoning would essentially not allow establishment of a sugar mill within a 25-km radius, and also proposed that out growers in a particular area only supply cane to mills within that radius.
Now, the USMA says Shakti Sugar is 19kms from Kamuli Sugar and 5kms from the nucleus farms of Kakira Sugar and Lugazi Sugar, which are both already licenced and operational.
Bon Sugar Mill Ltd (C.N. Sugar Ltd), on the other hand, according to the USMA, is 19kms from Bugiri Sugar Ltd, and in a region where other licenced millers have nucleus sugarcane farms in which they have invested heavily.
In July 2022, the millers petitioned the ministry of trade, protesting the new licenses and how they would adversely affect the growth of the sugar industry.
This prompted the ministry of trade to issue notices halting the new millers from undertaking any development until a sugar board is in place.
USMA chairperson, Jim Kabeho, says licensing too many factories in one sub-region has caused an unstable supply of cane in the area.
“We have excess sugarcane during some seasons and a shortage in others. We need a council that will manage and regulate the licensing of new sugar factories because most of the factories that are being licensed were not planned,’’ he observed on Wednesday.
He added: “Millers are not operating at optimum crushing capacities due to shortage of cane resulting from poaching.’’
Currently, due to shortage of cane, a ton costs Shs240,000, But since 2017, farmers have been frustrated by the millers’ offer of Shs175,000 per ton, which further dropped to Shs96,000 in 2021.
The chairperson Uganda Sugarcane Growers Association (USGA), Mr Isa Budhugo, says factories that are between 20 and 30 percent complete cannot be relocated, adding that zoning is not provided for in the sugar law.
“Anybody is free to put up a mill anywhere. That is why the ministry of trade went ahead to license those millers,’’ Mr Budhugo said.
He attributed the shortage of cane in Busoga Sub-region to millers halting agricultural aid to farmers.
Budhugo emphasized that they need more sugar factories in the Sub-region because Busoga has 2.4m acres of land yet sugarcane only occupies 300,000 acres, according to the 2014 population and housing census.
Meanwhile, Busoga Out growers Association (BSGA) General Secretary David Mombwe decried zoning.
“It should not be included in the new law because between 2017 and 2021, we had surplus cane which we ended up selling to Kenya and Atiak in Northern Uganda,” he lamented.
