Dar el salaam. Faced with a 290,000-tonne shortage, Tanzania is now issuing permits to traders to import sugar from Uganda.
Last June, Tanzania stopped issuing new permits for importation of sugar to protect local producers and traders.
Tanzania produces about 300,000 tonnes of raw sugar annually compared to demand volumes of 590,000 tonnes.
The increasing demand for both industrial and domestic consumption has subsequently created a deficit of about 290,000 tonnes.
Tanzania had previously blocked sugar imports from both Uganda and Kenya which could have created a supply shortage.
The sugar had been blocked on claims that both Uganda and Kenya were dumping cheap imports on the Tanzania market.
Mr Japhet Hasunga, the Tanzania Agriculture minister, said last week the country was experiencing a shortage and needs to close the gap.
At the close of last year Tanzania slapped a 25 per cent Import Duty on sugar from Uganda, contrary to the zero rate recommendation of the EAC Common Market Protocol.
According to Mr Hasunga, sugar production in Tanzania rose to 303,431 tonnes in the 2017/18 financial year, from 293,075 tonnes in the 2015/2016 financial year.
Sugar trade in the region has been dogged by controversy.
At the time when Tanzania blocked sugar supply from Uganda last year, it had been claimed that the sugar had been imported from Kenya and repackaged and exported to regional markets.
Tanzanian President John Magufuli said the ban was because some government officials had been abusing authority to issue orders to import sugar for their own interests.
High level discussion at both presidential and ministerial level between Uganda and Tanzania had been ongoing with the view to chat a way forward.
Trade minister Amelia Kyambadde, told journalists last year that her ministry was discussing with its Tanzania counterparts to chat a way forward.
In July Tanzania, according to Uganda Revenue Authority blocked 12,000 bags of locally manufactured sugar, which had been exported to the country by Kakira Sugar Works.
Ugandan sugar producers ask govt to reconsider zoning
Meanwhile, top sugar producers have asked government to reconsider Parliament's rejection of zoning for millers because it undermines output due to competition for cane.
Mr Jim Kabeho, the chairman of the Uganda Sugar Manufacturers Association, said last week that allowing producers to establish mills within 25 kilometres of each other will lead to competition and cause producers to operate below capacity.
"We asked for zoning and we didn't get it. We are now waiting to hear from government because we are already losing on production," he said.
At least nine factories were established in the past decade, some too close to other plants, according to the lobby group thst includes Kakira Sugar, Kinyara and Sugar Corporation of Uganda Limited.
Last year, lawmakers in the country rejected demands for zoning, saying it would force the government to move millers or to buy land. Under Ugandan law, the president can either sign the bill or ask the lawmakers to review legislation that they have enacted.