Uganda: Manufacturers Speak out on Low Sugarcane Prices

The Uganda Sugar Manufacturers Association (USMA) has said the drop in sugarcane prices is a result of increased illegal imports of sugar in Uganda.

USMA chairperson Jim Kabeho said, “there is too much sugar being illegally brought into the country through the eastern Uganda porous border points.” 

Kabeho said the flooding of the market with large quantities of illegal sugar has led to the reduction in the price of sugar hence adversely affecting the price of sugarcane.

“A kilogram of sugar now costs Shs 5,000 from Shs 5,500,” said Kabeho, adding, “Consumption of our sugar is very low; so, once its prices go down, cane prices will also be at risk.”

Kabeho’s remarks come against the backdrop of complaints by outgrowers about the drop in the prices of sugarcane in eastern Uganda and Bunyoro.

Kaliro Sugar on January 29, 2024 informed outgrows that, “As we plan to start the factory after shutdown, management is hereby informing you all that the sugar prices in the market has continued to go down which has forced us further revise our sugarcane prices.”

The notice added: “The purpose of this note is therefore to inform all the stakeholders that as we start the plant, our sugarcane prices will be Shs 170,000 with effect from 30th January 2024. (7:00am). We also promise all our stakeholders that management will continue to review the sugarcane prices depending on the sugar prices on the market.”

The chairperson of Uganda Sugarcane Growers Association (USGA) Isa Budhugo said the new sugarcane price is below the breakeven point of a farmer at Shs 210,000.

“We have taken out loans from the banks to grow sugarcane; we are worried banks will come after our collateral if the sugarcane prices don’t rise in the coming weeks.” 

Cases of smuggling large quantities of sugar into Uganda via Kenya have been on the rise in recent months.

In December 2023, Uganda Revenue Authority customs officials impounded 800kgs of sugar which had been smuggled into Uganda through porous border points in Mutukula.

Smuggling of duty free sugar not only hurts the sugar industry but also the outgrowers of sugarcane whose livelihoods entirely depend on supply of sugarcane to the factories.