Ugandan sugar barons finally find way to export sweetener to Kenya

Thursday December 11 2014

Cargo trucks line up at the Malaba border

Cargo trucks line up at the Malaba border awaiting clearance. Uganda claims that Kenya is blocking its sugar from entering the country. PHOTO | FILE  NATION MEDIA GROUP

By MWANIKI WAHOME

Kenya has ceded ground to Ugandan sugar barons’ demands, allowing them to bring in the sweetener with the only requirement being application of import permits.

The licence will be issued within a week of application. 

This follows strong lobbying by Ugandan sugar millers and exporters who enlisted the support of President Yoweri Museveni.

“Some traders wanted to bring in sugar without permits but we will be meeting with them to explain,” interim director-general of Agriculture, Food and Fisheries Authority Saulo Busolo said.

Uganda produces about 465,000 tonnes of sugar against a consumption of 320,000 tonnes, leaving them with a surplus.

Kenya has a cap on sugar imports at 300,000 tonnes to protect local millers from competition. The country produces about 600,000 tonnes a year.

Ugandan sugar firms have been pushing Kenya to open up the market to help in balancing trade between the two countries, which is currently in favour of Kenya.

“Sugar from other countries, which are not in the East African Community, enters Kenya with ease. The Uganda sugar industry would want to know why,” Uganda Sugar Manufacturers Association chairman Jim Kabeho had complained last month during a meeting.

The dispute has been ongoing, with East African ministers’ meeting in July ordering that the standoff be resolved.

The tussle goes back to August 2011 when Kenya allowed Uganda to import sugar through the Port of Mombasa duty-free for six months following a request to help the nation plug a deficit.

The only condition was that the sugar would be consumed in Uganda. If it was re-exported back to Kenya, a levy of 100 per cent would be charged.

After the six months in January 2012, however, Kenya tax officials observed that sugar imports from Uganda were rising steadily.

Ugandan businessmen were accused of exporting it back to Kenya. The Kenya Revenue Authority said it was difficult to distinguish between sugar imported during the six months and other ordinary imports.

Mr Busolo said Uganda had said it was capable of exporting 150,000 tonnes to Kenya every year.

Kenya imposed an import ban on Ugandan sugar in October 2012 on suspicion that the country was dumping duty-free sugar that it had been allowed to import in 2011.

In February last year, Kenya Revenue Authority stopped over 220 tonnes of Uganda-manufactured sugar from entering the country.

Mr Kabeho, however, said Uganda had already notified other East African Community states that it was now a regional surplus sugar producer. 

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