Sugarcane harvesting. Red tape and duties have prevented sugar exports to from Uganda to Kenya. FILE
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Efforts to market sugar in Rwanda are hampered by the abundance of cheaper imports from outside East Africa.
Conflicts in South Sudan and eastern DR Congo have also curbed the trade.
Ugandan sugar processors are holding 50,000 metric tonnes of unsold stock as exporters face obstacles in East African markets ranging from wars to duties, the head of the industry association said.
He added that red tape and duties have prevented exports to Kenya.
“We are stuck with big volumes of sugar,” Uganda Sugar Manufacturers’ Association Chairman Jim Kabeho said. “This is affecting our expansion programs. We are threatened with closure.”
Efforts to market sugar in Rwanda are hampered by the abundance of cheaper imports from outside East Africa, Kabeho said. Conflicts in South Sudan and eastern DR Congo have also curbed the trade, he said.
Uganda is set to produce a surplus of sugar this year, according to the association. Production may climb to 442,500 tonnes from 334,040 tonnes last year. Domestic demand is about 320,000 tonnes annually.
The country usually imports sugar from India and Brazil and exports to nations that border it: Rwanda, Kenya, South Sudan and DR Congo. Uganda belongs to the five-nation East African Community common market, which includes Kenya, Tanzania, Rwanda and Burundi.
The EAC this year gave Rwanda a six-month extension to import duty-free sugar from outside the region to address supply shortages, the Nairobi-based East African newspaper reported in January, citing Rwandan Trade Minister Francois Kanimba.
“Opening up export markets is the major problem at the moment especially to the EAC partner states like Rwanda and Kenya,” Wilberforce Mubiru, the association’s secretariat manager, said in an e-mailed response to questions. “Exports to the EU are almost impossible at the moment due to a large supply of sugar on the world market” from countries including India and Brazil, he said.
Members of Uganda’s manufacturing association include Kakira Sugar Works Ltd., owned by the Madhvani Group of Uganda, and Mauritius-based Rai Group’s Kinyara Sugar Ltd.
Others include Sugar Corporation of Uganda Ltd., owned by the India-based Mehta Group, and Kaliro Sugar Ltd., part of Alam Group of Uganda. Kabeho declined to give this year’s sales figures.
Cyprian Batala, Uganda’s assistant commissioner in the Trade Ministry in charge of the sugar industry, declined to comment by phone.
-Bloomberg-
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