Tanzania sugar producers refute allegations of price manipulation amid import challenges 

TANZANIA – The Tanzania Sugar Producers Association (TSPA) has refuted accusations of failing to import sugar and stockpiling it to inflate prices.  

In response to a recent parliamentary debate, TSPA emphasized its commitment to increasing domestic production and addressing potential shortages. 

TSPA Chairman Ami Mpungwe explained that the association alerted authorities last year about potential production shortfalls due to forecasted El Nino rains, which would impact supplies from December onwards. They urged authorities to initiate import procedures early to mitigate the anticipated shortages. 

“There were several communications reminding the authorities, and when December arrived, the situation unfolded as we had foreseen,” Mpungwe said.  

He noted that import permits for sugar had not been issued until December, prompting Kilombero Sugar Company to redirect a shipment of 45,000 tonnes destined for another country back to Tanzania. 

Mpungwe emphasized that claims suggesting sugar producers were allowed to import and resell sugar but failed to do so were untrue. He asserted that they have evidence to support their position.  

“Our main task is sugar production, but we engaged in imports to help alleviate shortages,” he stated. 

He added that Kilombero is primarily in the business of sugar production, not importation, and would have supported the government setting up an agency to import sugar if it had been proposed earlier. 

Despite the accusations, Mpungwe noted that sugar producers opted not to engage in a public dispute. Instead, they chose to present their case directly to the parliamentary Agriculture and Industry Committee, only for the proposed meeting to be postponed to August this year. 

“We were given the opportunity to meet with the Parliamentary Budget Committee last week to discuss the Finance Bill. We tried to communicate, but decisions were made without our involvement, and we have been accused and judged without being heard,” Mpungwe said. 

In June 2024, the government proposed legal amendments to empower the National Food Reserve Agency (NFRA) to buy, stock, and reserve sugar as a national food reserve, ensuring its availability in the domestic market during shortages. 

According to Mwigulu Nchemba, Minister for Finance, this measure aims to maintain a constant supply of sugar and prevent hoarding by manufacturers while protecting local industries. 

Additionally, Nchemba proposed a charge of Tsh50 (US$0.019) per kilogram of sugar by-products. This measure is intended to boost revenue and empower the Sugar Board to enhance training and capacity building in the sugar industry.  

It will also support monitoring sugar production through the expansion of existing industries and encouraging new investments. 

Tanzania faces a significant sugar deficit, with production reaching 460,049 tonnes in 2022/23 against a demand of about 800,000 tonnes for the 2023/2024 financial year.