UGANDA – Ugandan outgrowers in the eastern district of Buikwe are protesting against the plummeting prices of sugarcane, which have dropped from Ush250,000 (US$67.72) per tonne just over a year ago to Ush140,000 (US$37.92) per tonne.
The protest is directed at the Lugazi-based Sugar Corporation of Uganda Ltd (Scoul), with growers halting supplies in response to the dramatic price decline.
Millers attribute the falling prices to a glut caused by shrinking regional markets, resulting in unprecedented levels of domestic sugar stocks.
“It is a misconception for anyone to believe that cane prices are simply a reflection of the supply of cane; they are more a reflection of the challenges in the market for refined sugar,” explained Wilbur Mubiru, spokesperson for the industry lobby Uganda Sugar Technologists Association.
He emphasized that better access to the East African market would alleviate the current pricing issues for both refined sugar and sugarcane.
Retail sugar prices in Uganda have seen a sharp decline, averaging USH3,300 (US$0.89) per kilo, less than half the peak price of UsSH7,000 (US$1.90) per kilo three years ago.
The COVID-19 shutdowns in 2020-21 significantly reduced sugar demand, leading many farmers to abandon sugarcane farming. However, as markets reopened amid international shipping disruptions, dry conditions in the region spiked demand, causing retail prices to soar temporarily.
“We see cane prices falling even more as the crop planted over the past two years reaches maturity,” noted Albert Bituura, general manager at Bwendero Sugar.
He added that Uganda’s dependence on the Kenyan market, which is currently saturated with domestically produced sugar due to favorable rains, has exacerbated the situation.
Uganda’s 16 sugar factories have an installed capacity of 1.2 million tonnes per annum but are operating at only half that capacity due to constrained access to export markets.
Farmers protest CN Sugar Factory closure
The protests by Buikwe growers coincide with ongoing demonstrations over the closure of CN Sugar Factory.
On June 17, Uganda’s Trade Minister Francis Mwebesa revoked the factory’s license for failing to secure the required 500 hectares of nucleus estate and establish a network of sugarcane outgrowers, as mandated by the National Sugar Policy.
Farmers affected by the closure are now facing severe financial hardships, with many having taken bank loans to establish their farms and now at risk of arrest for defaulting on payments.
Twaliki Isabirye, Chairperson of Namayingo Sugarcane Growers Association, expressed the distress of the farmers, stating they are stuck with 3,000 acres of sugarcane intended for supply to the now-closed factory.
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