Uganda produces enough sugar for its citizens and some surplus for export, the Uganda Revenue Authority (URA) Commissioner for Customs Dicksons Kateshumbwa said in an interview last week.
“As a regional paper, please inform the residents of the East African Community (EAC) that this is not true [the allegation that Uganda is re-packaging foreign sugar]. Uganda produces more sugar than even its citizens can consume. Currently Uganda has registered eight sugar manufacturing companies which has multiplied sugar production in the country to the extent that a lot of it cannot be consumed locally and gets finished. Thus this warrants to look for market elsewhere,” he told East African Business Week.
He was reacting to the numerous media reports that Uganda imported sugar from Brazil and re – exported it to neighboring Kenya.
Ugandan sugar companies include Kakira Sugar works; Sugar Corporation of Uganda Limited (SCOUL) – Lugazi; Kinyara Sugar Works; Kaliro Sugar Limited; Mayuge Sugar Limited; Kamuli Sugar Limited; GM Sugar Limited and Sezzibwa Sugar Factory.
Referring to URA statistics collected in 2014, Uganda produced 438,200 metric tonnes of sugar and the 35 million people living in Uganda consumed 320,000 mts leaving 118,200 mts as surplus for sale elsewhere.
Currently, in 2015, Uganda produces about 465,000 tonnes of sugar against a consumption of 320,000 tonnes, leaving it with a 145,000-tonne surplus.
He said Kenya has a sugar deficit due to breakdown or regular maintenance of its factories.
He said Kenya produces an average of 600,000 mts annually, but consumes between 800,000 mts and 850,000 mts. This is a deficit of between 250,000 mts and 300,000 mts.
It counts to 30% in term of percentage he revealed. The retail price for a kilo of sugar in Uganda is Ush3,000 while in Kenya it is Ksh5 with the exchange rate currently at Ush 4,250 to one Kenya shilling.
Kateshumbwa said given these figures, it makes no sense for Kenya to import it from South America and impose a ban on sugar from Uganda.
“As URA we cannot allow such diversion into the market. It is in our interest not to allow repackaging. Uganda imports concentrates from Brazil for industrial use and making juices and not sugar as a product for sale.
Therefore it is not true that we import and allow it to go to Kenya. We cannot stop sugar in transit if imported from neighboring countries,” he said.
The EAC Common Market Protocol allows free movement of goods across the borders. EAC states signed protocols waiving free movement of goods manufactured in the member states in order to promote trade in the EAC.
On Uganda imports, Kateshumbwe said Uganda imports $700 million worth of goods from Kenya while it exports $178 million worth of goods to the same country.
Meanwhile, President Yoweri Museveni has assured SCOUL, a subsidiary of the Mehta Group, that part of the 900,000 tonnes of sugar that the company produces which can’t be sold locally will find market in Kenya.
The assurance follows a recent agreement government signed with their counterparts in Kenya. The President said Kenya is expected to act with humility because Uganda imports a considerable amount of goods from there.
“The government (of Uganda) must give more support to these industries; we must discuss with Kenya and make sure that it buys this extra sugar. They will buy it because we buy a lot from Kenya, there is no way you can say that I buy from you but you don’t buy from me,” Museveni said.
The president was speaking shortly after commissioning a new sugar mill and a carbon dioxide plant at SCOUL in Lugazi recently.
He thanked President Kenyatta for agreeing to remove non-tariff barriers, deepen commercial ties and widen the regional market of 150 million people.
According to Kenyan Press, the Ministry of Trade officials said they were expediting issuance of import permits to Ugandan sugar traders to enable them feed the undersupplied Kenyan market.
Kenya has had a near diplomatic stand-off with Kampala over the Ugandan traders’ quest to export sugar to the region’s largest economy, arguing that the country did not produce enough sugar to meet its consumption needs and would therefore not have excess to export.
Foreign Affairs and International Trade secretary Amina Mohamed said the slow pace of processing of permits for Ugandan sugar exporters was behind the stalemate, adding that the issue had been resolved.
Mrs. Mohamed said the delays had been caused by Kenya’s re-organization of ministries and directorates in the sector, including the Kenya Sugar Board which is now a unit within the Agriculture, Fisheries and Food Authority (AFFA).
The AFFA, however, maintained that the agreement did not provide for free flow of Ugandan sugar into Kenya but a guided movement of the lucrative commodity to prevent the flooding of the Kenyan market and killing local millers.
“The imports would have to be based on Kenya’s deficit,” said AFFA director-general Alfred Busolo.
Uganda has continually faulted Kenya’s 2012 decision to block its sugar in violation of the EAC Common Market Protocol, which provides for free movement of goods without restrictions.
Kenya’s sugar market remains protected from cheaper COMESA imports under special safeguard measures that were supposed to end in January 2012 but have since been extended annually at the request of Nairobi.