President Museveni has appealed to his visiting Tanzanian counterpart, John Pombe Magufuli to encourage entrepreneurs in his country to import sugar from Uganda.
Mr Museveni said there was surplus production of sugar in Uganda.
This was at a meeting held this morning at State House, Entebbe.
Uganda's Minister of Foreign Affairs, Mr Sam Kuteesa, his Tanzanian counterpart, Mr Augustine Mahiga and Uganda's Minister of Public Service, Mr Muruli Mukasa, attended the meeting.
Mr Magufuli is in Uganda to attend the 19th Ordinary East African Community (EAC) Heads of State Summit that is taking place in Kampala later this week.
Mr Museveni urged Mr Magufuli to encourage Tanzania entrepreneurs
President Magufuli welcomed the suggestion from his host saying that would help address the sugar deficit in Tanzania.
"Sugar production in Tanzania is low. We always have a deficit in the months of January, February and March. Buying sugar from Uganda defines the business of EAC," said President Magufuli.
According to statistics, Uganda's consumption of raw sugar in 2016 stood at 350,000 tonnes. The Government of Uganda is keen to attract investment in the sugar sector to meet the growing demand that is forecast to hit 700,000 tonnes by 2030.
A kilogramme of Sugar in Uganda goes for between Shs3,200 and Shs4,000.
On the other hand, Tanzania's annual domestic sugar consumption is about 420,000 tonnes while local production is 320,000 tonnes. This leaves a deficit of about 100,000 tonnes a year to be cushioned by imports from Brazil, Thailand and other Southeast Asian countries.
In an interview last year with Reuters Africa, Mr Wilberforce Mubiru, who is the Secretariat Manager of the Uganda Sugar Manufacturers' Association (USMA), said the total production of sugar in Uganda in 2017 was expected to hit 475,000 metric tonnes up from 430,867 tones in 2016.