UGANDA: Sugar millers deny hoarding sugar to raise prices

Published: 12/06/2017, 11:18:23 AM

Sugar millers under their umbrella association the Uganda Sugar Millers Association have denied allegations they are hoarding sugar so as to sell it at higher prices, according to Uganda's Independent newspaper.

Trade Minister Amelia Kyambadde summoned the sugar millers to a meeting Tuesday 5th December 2017 at the Ministry offices in Kampala after MPs vowed to table a motion on the floor of Parliament over the continuous high sugar prices.

The minister tasked the millers including Kakira Sugar, Kinyara, Lugazi Sugar and others to explain why sugar prices are still high yet they claim they have enough stock.

The millers led by their chairperson Mwine Jim Kabeho told the Kyambadde that sugar prices are not controlled by sugar millers but it's totally in the hands of wholesalers and retailers.

They said factory prices have reduced from UGX198,000 (US$54.4) per bag in June 2017 to the current UGX170,000 leading to retail prices going down to UGX4,000 and below in some areas.

"The recommended retail price by the millers is UGX3600 and some areas UGX3400, therefore on average retail prices should not go beyond UGX4,000 for premium or packed sugar", explained Kabeho

Kabeho added that sugar prices are driven by sugarcane prices, farm yields and factory recoveries. He says lack of mature cane for crushing has led to low production and low factory recovery.

The Minister implored the millers to prevail over the distributors to maintain the recommended wholesale price of UGX3,400 and the distributors to prevail on the retailers to maintain the retail price.

"I am tasking the sugar millers to come up with a maximum price for sugar but as Government our position is that the price of sugar per kilogram should not exceed UGX4,000", said Kyambadde.

On the issue of importation of duty free sugar, Kabeho said that they have enough stock of sugar in Uganda that will take care of the festive season and there is no need for duty free sugar importation which if done would come with negative implication to the sugar millers and sugarcane out-growers.

Minister Kyambadde reiterated her statement and said Government has not taken a decision to reduce taxes on imported sugar.

The millers reported to the minister the challenge of rampant sugar smuggling mostly coming from Kenya which is affecting the sugar industry in Uganda.

The millers explained that the smugglers are now repacking the smuggled sugar into local company bags before selling to the market. So far Kakira and Kinyara have petitioned Government about the cases where their local bags are being used to repack smuggled sugar.

In response, Alex Ruhinda the Assistant Commissioner Customs URA confirmed that smuggling of sugar has indeed escalated with over 100 metric tonnes impounded in the past four months.

The highest volume impounded is 52.7 tonnes that was smuggled through the border with DR Congo, 26.9 tonnes was smuggled through the western border of Katuna, Mirama hills, and 11.7 tonnes smuggled through the eastern border. Most of this sugar comes from Brazil, Egypt, Rwanda, Kenya and South Africa.

The Ministry and the millers agreed to issue a joint statement to explain to the general public the sugar production levels, the current sugar stock, wholesale price per bag, the wholesale price and the recommended retail price.