18 February 2013

Uganda: Cane Shortage to Blame for Sugar Prices

Kampala — The shortage of sugar canes for manufacturers has led to a hike in Uganda sugar prices on the market, East African Business Week understands. According to a survey we conducted around Kampala city, many wholesalers had increased their prices from $51 (Ush132,000) for a 50kgs bag of sugar to $55 (Ush140,000).

This has led to retailers hiking their prices from Ushs3000 to Ush3500 per kilogram. Uganda experienced her worst ever sugar prices in the country last year when a kilogram went up to $4 (Ush10,000). This led to rationing of sugar to buyers. It also led the government to waive excise duty on imported sugar.

Local sugar manufacturers urged then that the price hike was due to shut down of their plants for maintenance while others alleged that their canes were burnt by rioting sugar plantation workers.

Jim Kabeho the chairman of the Association of Uganda Sugar Cane Technologies an umbrella body that brings together sugar manufacturers told EABW in telephone interview that in the year 2012 all the factories in the country produced 289,665 tonnes of raw sugar compared to a forecast of 327,075 tones.

This has negatively impacted on the volume of white sugar manufactured. Uganda has three major sugar manufacturing factories, Kakira Sugar Works, Kinyara Sugar Works and Sugar Corporation Of Uganda limited (SCOUL) and around four small sugar manufacturing firms.

Kibeho also attributed the sugar price rise to upcoming juggleries that practice sugar cane poaching. Sugar cane poaching refers to competition for sugarcane from out growers between sugar manufacturing companies. If the problem of sugar shortage continues, it will likely affect other industries like the pharmaceutical companies that use sugar as their basic raw materials.

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