Uganda: Sugar Exports Decline By Shs108b Due to Blockades

22 January 2021

Sugar exports have dropped by Shs108b, representing a 35 per cent decline in earnings in the last three years, according to data from Bank of Uganda.

The decline, data indicates, could have been occasioned by export blockades placed on Uganda's sugar by East Africa member states on claims of dumping.

Kenya and Tanzania, specifically separately imposed blockades on Uganda's sugar on claims that dealers were importing and re-exporting cheap sugar into their markets.

The claim saw Uganda lose out on sugar exports ranging between 100,000 and 130,000 tonnes.

For instance, according to data from Bank of Uganda, cumulative exports for the year ended November 2020, dropped to $83.39m (Shs308b), which was lower than the $95.3m (Shs352b) the country had earned in the same period between November 2018 and November 2019.

In the same period between 2017 and 2018, Uganda had earned $112.7m (Shs416b), which means that close to Shs180b has been lost in the last three years.

The blockades have also seen stockpiles build, accumulating to more than 150,000 metric tonnes.

Kenya, Rwanda and Tanzania have all blocked or allowed just a few metric tonnes to enter their markets in the last three years.

Early, this week, Kenya said it would allow at least 90,000 metric tonnes of Uganda's sugar to enter its market but manufacturers yesterday said nothing had been formally communicated.

Mr Jim Kabeho, the Uganda Sugar Manufacturers Association chairman, yesterday told Daily Monitor Kenya had not issued any permits for the 90,000 sugar imports.

"We have not received permits for the 90,000 tonnes consignment or even discussed anything in that regard," he said, noting that in 2019 Kenya had promised to issue permits for Uganda's sugar exporters but nothing has come through ever since.

"When Kenya provides the permits to ship the 90,000 metric tonnes, it is then that we will be able to talk with certainty. Otherwise, we cannot celebrate yet," he said.

Uganda currently has stockpiles worth $45m (Shs168b), which Mr Kabeho, said have been building since 2019 as a result of blockades.

Tanzania and Rwanda were the first to close out Uganda's sugar followed by Kenya last year.

However, although Uganda had resumed exports to Tanzania, they have since February 2020 been closed out with the country applying for permission from the East Africa Business Council to import sugar outside East Africa. The situation, Mr Kabeho said, has not been helped by an increase in sugar imports, which are stacked in various bonds across the country.

President Museveni issued a directive in 2018 for the closure of sugar bonds, reasoning that they were suffocating local industries.

However, nothing has been done, on top of claims that [bonded sugar] owners don't pay taxes.

Mr Kabeho last year said manufacturers had built capacity to produce about 550,000 tonnes of which about 370,000 tonnes are consumed locally. Manufacturers have been searching for new markets in addition to South Sudan and Eastern DR Congo.

Openings, according to Mr Kabeho, have been seen in regional markets such as Ethiopia and Zambia.

Kenya says

According to media reports, Uganda Manufacturers Mssociation (UMA), said Uganda had more sugar than what actually Kenya intends to import.

"We are considering importing sugar from Uganda under Comesa and the EAC. The import being negotiated will not be affected by the exhaustion of allocated quota under Comesa safeguard for 2020," Ms Rosemary Owino, the Kenya Sugar Directorate, Agriculture and Food Authority, in Kenya's Ministry of Trade, said.

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