Sugar Bag |
Statistics from the
Uganda Sugar Manufacturers Association (USMA), which consist of Kakira,
Kinyara and SCOUL, shows that the industry projects to produce 388,000
tonnes of sugar this year, up from 326, 968 tonnes in 2017.
These figures
exclude production from more than ten other small factories that are not
members of USMA. Similarly, there is a surge in informal sugar imports,
especially from Kenya into the Ugandan market, according to USMA
Secretariat Manager, Wilberforce Mubiru. He, however, could not
ascertain the volume of imports.
"The demand for
sugar from the region has also reduced because countries are importing
cheap sugar from other markets like Brazil," he told The Independent in
an interview.
He said some
African countries including Mauritius, Swaziland, Mozambique, Algeria
and Zambia are stuck with tonnes of sugar after the European market
removed the quota on sugar it was importing from them.
For that, the price
of sugar has dropped by about 31% to an average of Shs 3, 500 per
kilogramme at the beginning of 2018 compared with Shs4, 600 in April
last year.
Though the actual
amount of sugar on the market remains sketchy, the country's sugar
demand in the previous year stood at Shs 369,000, according to the
Ministry of Trade.
Uganda witnessed a record surge in sugar price in 2013 when a kilogramme went for as high as Shs 7,000.
"We expect a
further decline (in sugar) price this year," Mubiru said, adding "Maybe
in 2019 is when we will have an increase (in price)."
He said factories are now selling a 50kg bag of sugar at Shs134, 000, down from Shs190, 000 last year.
At the end of last
year, government through the Ministry of Trade recommended that the
price per kilo be sold at not more than Shs 4,000 due to public outcry.
However, Mubiru
said the target for sugar production in Uganda should increase to match
the anticipated growth in number of industries and population -the
potential buyers of the product.
White sugar demand
Due to lack of
capacity in terms of output and technology, local producers within
Uganda and East Africa continue to lose millions of dollars to outside
markets as industries import the raw material from Europe and other
markets.
According to the
East African Gazette produced early last month by the East African
Council of Ministers, Uganda's industrialists were allowed to import the
largest amount of refined sugar at subsidized duty totaling to over
324, 555 tons followed by Kenya with 19, 700 tons, Burundi 1, 701 tons
and Rwanda 23.4 tons. In total, the four countries would record 345,
979.4 tons as white sugar imports from outside East Africa.
"The Council of
Ministers has approved the following manufacturers to import the
specified quantities of raw materials at the specified duty rate under
the Duty Remission Scheme," Al Hajj Kirunda Kivejinja, the chairman of
the Council of Ministers wrote.
Some of the 15
Ugandan companies under this arrangement include Century Bottling
Company Ltd, Britannia Allied Industries, Nile Breweries and Uganda
Breweries. In Kenya, eight companies are benefiting from this move. Some
of the companies include Excel Chemicals Limited, Patco Industries
Limited and Highlands Mineral Water Limited among others. In Rwanda only
one company, Nyanza Milk Industries Limited was granted permission
while Burundi also had one company - Burundi Brewery given the
incentive.
Patrick Oyuru, the
director sales and marketing at Coca-Cola, told The Independent that the
imports they record for the white sugar support their industrial
activity and that EAC producers have no capacity to supply the
quantities needed to them. "We note that this importation is well
regulated," Oyuru, whose company is importing 22, 165 tons said, adding
they continue to engage the local producers on the possibility of having
a refinery for white sugar in Uganda.
Mwine Jim Kabeho
from USMA said that local producers in Uganda would need to increase
production by one million tonnes to be able to meet the demand from the
likes of Coca-Cola in addition to building a high-tech refinery which no
other EAC country has at the moment apart from Kenya that is eying one
in the near future.
The average white
sugar price index for 2017 quoted in London was US$432.10 per tonne; the
highest was US$ 556.25 and the lowest was US$359.05.
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