Uganda has blocked a request to export excess sugar cane from outgrowers in Busoga region to Kenya.
Farmers say they have an overproduction of some 500,000 tones of sugar that processors are unable to absorb but the Minister for Trade, Industry and Co-operatives Amelia Kyambadde says the surplus is only temporary and should not cause alarm.
Ms Kyambadde told parliament that sugar factories in Uganda have been producing below capacity since 2010 due to a shortage of cane and that opening up the market to neighbouring countries like Kenya would worsen this problem.
She, however, added that the surplus will be easy to absorb since Ugandan sugar manufacturers have the capacity to crush 650 million tonnes of cane and had been forced to perform below capacity due to shortages.
Ugandan sugar factories are said to crush an annual average of 430 million tonnes of cane, meaning they are operating at around 70 per cent.
Ms Kyambadde also told parliament that opening the border to neighbouring factories would also compromise President Yoweri Museveni’s directive that is intended to stop the exportation of raw materials.
Outgrowers in the eastern region say they have requested for permission to export 54,000 tonnes of sugarcane to Kenya, over a trial period of three months.
Issa Budhoga, the chairperson of Busoga Sugar Cane Growers Association, said farmers permission to sell an average of 600 tonne of cane daily to factories in western Kenya .
Mr Budhoga says heavy rains have seen sugar cane maturing faster than usual.
The fact that many farmers have improved on their agronomic practices has also resulted in increased productivity and that factories in Uganda no longer have the capacity to consume this surplus.
“Farmers who used to harvest 15 tonnes now produce 35 to 40 tonnes, and the sugar manufacturers have no capacity to absorb these,” he says.
He said these two factors explain the sugar cane surplus. But Ms Kyambadde disputed the narrative, blaming closure of factories for maintenance and the breakdown of three others.
She said Kakira Sugar Works and Sugar Corporation of Uganda closed their factories for between five and six weeks of maintenance in the months of May and June and that’s why there was a glut in the sugar cane market.
Ms Kyambadde added that over the May to June period, the productions lines of three other factories Kamuli, Mayuge and GM sugar all broke down.
Since these factories already have surplus sugar anyway, which Ms Kyambadde blames on the failure to access markets in the East African Community, there is possibility that these manufacturers are reducing production intentionally.
At the moment, Ugandan sugar can’t be sold in Rwanda. A dispute between Kampala and Kigali escalated to a trade blockade in February.
As a result Ugandan products including cooking oils, sugar, household items and cement cannot legally be sold in Rwanda.
Sugar being a sensitive product in the East Africa Community, it attracts a common external tariff of 100 per cent before entry.
The high tariff means Kenya and Tanzania can collect higher revenues from the product and the two countries have been using tariff and non-tariff barriers to stop Ugandan sugar from entering into their territories.
The two countries have on different occasions accused Uganda of importing the sugar from Brazil and India and then attempting to sell it to Kenya and Tanzania.