UGANDA – Ugandan sugar farmers can breathe a sigh of relief after Kenya and Uganda ironed out a trade dispute over the commodity that has lasted for years.
During a meeting held in Kampala, attended by Uganda Trade Minister Amelia Kyambadde and Trade Cabinet Secretary Betty Maina of Kenya, the two countries agreed that Uganda will export 90,000 tonnes of the commodity to Kenya as soon as the verification exercise on country of origin is completed.
According to reports by Daily Monitor, this will now account for 43 per cent of the total imports by Kenya from the Common Market for Eastern and Southern Africa (Comesa).
Kenya had been importing 350,000 tonnes of sugar from COMESA due to a widened deficit in its market.
However, the country has since capped the duty-free imports from the trade block to 210,000 tonnes to boost local production.
“Regarding Kenya’s restriction of Uganda’s sugar exports, Uganda shall export 90,000 tonnes of wholly originating sugar per annum.
“The findings of the ongoing sugar sector verification mission shall inform implementation of this decision,” joint communiqué signed by both Uganda and Kenya said.
Kenya had entered into a deal in which it allowed Uganda to export its surplus sugar into the country about three years ago.
However, the leading East African economy delayed the implementation until late last year when only 20,000 tonnes of the 90,000 tonnes were allowed to be shipped into the country pending verification of the country of origin.
Kenya imposed the ban due to dumping claims
Kenya had stopped Uganda from exporting its sugar to its market on claims that the commodity was being imported and repackaged before being dumped in the country.
However, Uganda dismissed the claims, noting Kenya, which has a huge sugar deficit, was only using the excuse for protectionist purposes.
The verification exercise had been postponed twice, which had worried local producers amid growing stockpiles.
Uganda’s government was also officially tasked to notify Kenya of its decision to abolish bonded warehousing of sugar and provide verifiable evidence that would help in reducing smuggling and re-bagging of non-originated sugar.
Following blockades imposed on the commodity not only by Kenya but other East Africa members, Uganda exported sugar worth US$83.39m in the year ended November 2020, a decline from US$95.3m earned in the same period in 2019 and a further drop from 2018’s US$112.7m.
Cumulatively, sugar exports in the country have dropped by US$29.2m, representing a 35 per cent decline in earnings in the last three years, according to data from Bank of Uganda.
According to the Association of Sugar Manufacturers, the country’s stockpiles have grown, peaking to 150,000 tonnes in the last two years.
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