5 June 2014

East Africa: EAC Ministers Impose 100 Percent Duty On Imported Sugar

AS local sugar industries struggle to compete with cheap imported sugar with others suspending investments for expansion, Finance Minister Saada Mkuya Salum said a 100 per cent import duty will be imposed.

Ms Salum, who attended a recent East African Community (EAC) Finance Ministers meeting in Nairobi, told the 'Daily New' that sugar is a sensitive commodity which is also produced locally although short of meeting domestic consumption.

"We hope domestic producers will meet demand for the commodity," the minister, who also pointed out that struggling local producers need fiscal protection, said.

Local sugar factories produce less than 350,000 metric tons of the commodity per annum against consumption of over 480,000MT, necessitating importation to offset the difference.

The country's four major producers namely Tanganyika Plantation Company (TPC) in Moshi, Kilombero Sugar Company and Mtibwa Sugar Estates in Morogoro and Kagera Sugar based in Kagera Region have been complaining that their expansion plans have been frustrated by imports.

Ms Salum warned, however, that the government has the responsibility to protect consumers in case of hiked sugar prices by local manufacturers. Currently, a kilogramme of sugar has peaked to 2,000/-, which has forced the government to demand explanation from traders.

While the traders buy a kilogramme of sugar at 1,440/- wholesale prices delivered on door steps, they are selling it at between 1,900/- and 2,000/- a kilo.

Reports say while TPC has stopped expansion plans, the KSC is likely to follow suit unless the government took measures to contain cheap imports mostly from Asia and Brazil. Rampant sugar smuggling has also frustrated a huge project likely to reduce the over 120,000MT deficit by a half.

Southern Agriculture Growth Corridor of Tanzania (SAGCOT) Chief Executive Officer Geoffrey Kilenga said in Dar es Salaam recently that Agro EcoEnergy Tanzania Limited plans to invest over 500 million US dollars (over 800bn/-) in sugar, power and ethanol production.

"This is a huge project, which is under SAGCOT and will take off soon hopefully. The investor is very serious and has already started training local villagers on modern farming methods for rice and sugarcane," Mr Kilenga said.

Agro EcoEnergy Execuitve Chairman, Per Carstedt said his company has already spent 50 million US dollars since 2006 in undertaking various aspects of the project.

Mr Carstedt said the company's major investors and development banks are reluctant to put their huge capital in the project because of smuggled sugar, among other reasons.

"Our shareholders and development banks want to see the things agreed with the government implemented before committing their money," Carstedt told journalists recently.

Among other things, the company wants an end to land conflicts in the area where Dar es Salaam based bigwigs are frustrating the project by instituting court action and provide incentives for ethanol production as it is a green fuel.

Copyright © 2014 Tanzania Daily News. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.