TANZANIA – Tanzania has embarked on issuing permits to traders allowing importation of sugar from Uganda as the country still struggles to meet its 290,000-tonne sugar shortage, reports the East African.
The government had stopped issuing new permits for importation of the commodity to protect producers and traders.
This had seen sugar imports from its East African Community (EAC) counterparts, Uganda and Kenya, blocked on claims that both countries were dumping cheap imports into the Tanzanian market.
Subsequently, with the increasing demand for both industrial and domestic consumption and reduced influx from its neighboring countries, Tanzania experienced a deficit of about 290,000 tonnes of sugar.
The country produces about 300,000 tonnes of raw sugar annually compared to demand volumes of 590,000 tonnes.
Mr Japhet Hasunga, the Tanzania Agriculture minister, said the country was experiencing a shortage and needs to close the gap.
At the close of last year Tanzania slapped a 25% Import Duty on sugar from Uganda, contravening the zero rate recommendation of the EAC Common Market Protocol.
According to Mr Hasunga, sugar production in Tanzania rose to 303,431 tonnes in the 2017/18 financial year, from 293,075 tonnes in the 2015/2016 financial year.
Sugar trade in the region has been dogged by controversy.
At the time when Tanzania blocked sugar supply from Uganda last year, it had been claimed that the sugar had been imported from Kenya and repackaged and exported to regional markets.
Tanzanian President John Magufuli said the ban was because some government officials had been abusing authority to issue orders to import sugar for their own interests.
Deliberations by top government officials from both Uganda and Tanzania have seen efforts materialize into the Tanzanian government lifting the ban.
In July Tanzania, according to Uganda Revenue Authority blocked 12,000 bags of locally manufactured sugar, which had been exported to the country by Kakira Sugar Works.
Meanwhile, sugar producers through the chairman of the Uganda Sugar Manufacturers Association, have asked the government to reconsider its Parliament’s rejection of zoning for millers.
According to the lobby group, allowing producers to establish mills within 25 kilometres of each other will lead to competition and cause producers to operate below capacity.
“We asked for zoning and we didn’t get it. We are now waiting to hear from government because we are already losing on production,” he said.
Last year, lawmakers in the country rejected demands for zoning, saying it would force the government to move millers or to buy land.