Tanzania is revising sugar import rules to allow bulk importation in order to address domestic shortages.

Agriculture, Food Security and Co-operative Minister Christopher Chiza said covering deficits through merchants usually leads to excess imports and low prices that hurt local factories.

“We want to import in bulk because when we allow business people to import to plug a deficit, they import too much,” said Mr Chisa.

He said the Sugar Industry Regulations would be amended to allow importation of sugar by special bid as it is done in the oil sector. The amendments are expected to be tabled before the Council of Ministers in October.

Mr Chiza said illegal imports from Malawi are denying the government revenues and lock out local producers.

Sugar smuggled into the country is sold at between $1.05 and $1.17 compared with local sugar that is sold at between $1.17 and $1.35 a kilogramme.

“The new regulations will strengthen the ban on illegal sugar imports by ensuring traders that use our ports when importing sugar do not illegally sell it in the Tanzanian market while it is on transit,” Sugar Board of Tanzania director general Henry Semwaza said.

Bulk sugar, however, cannot be imported without a permit from the East African Community, which has set an external tariff of 75 per cent for sugar entering the Common Market. During deficits, member countries — Kenya, Uganda, Rwanda and Burundi — are allowed to import the commodity duty free.

Mr Chisa said a technical Committee would recommend issuing of permits to importers and introduce a tax regime aligned with the cost of producing sugar. Tanzania produces about half of the 590,000 tonnes of sugar it consumes per year.

READ: Tanzania faces sugar crisis as imports flood market

Mr Semwaza said a consortium of local sugar producers and traders would be established for the bulk imports, which are expected to start from July next year. The amended regulations will provide for establishment of a company, its management and the financing mechanism of the importation.

Mr Semweza said discussions are going on between stakeholders who will take part in the arrangement.

“The company will only be importing sugar once or twice annually when local producers are on a break. This will control smuggling of sugar into the country and protecting the local market,” he said.

The consortium will regulate the sugar supply chain in the country and rein in businessmen who stockpile sugar to cause an artificial shortage.

Local production

During the 2013/2014 season, a total of 308,000 tonnes of sugar was produced.

However, there is at least 80,000 tonnes of sugar that is still in reserve, which means Tanzania has enough sugar to last until the next season of production.

Generally, the supply of sugar for households and industrial use in the country is 590,000 tonnes per year.

Tanzania Sugar Producers Association executive secretary Deo Lyatto said illegally imported sugar is a threat to local producers, because it is cheap.