Uganda’s sugar exports decline by US$29.2m in three years due to dwindling export market

UGANDA – 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.

The drop according to Daily Monitor is attributed to occasioned export blockades placed on Uganda’s sugar by East Africa member states on claims of dumping.

Other than drop in earnings, the restricted trade has resulted to Uganda grappling with stockpiles of sugar worth US$45m.

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Uganda produces 510,000 tonnes of sugar annually with its biggest producers to include Kakira Sugar Works with a production of 180,000 tonnes, Kinyara Sugar Works produces 120,000 tonnes and Sugar Corporation of Uganda Limited produces about 100,000 tones.

Uganda produces 510,000 tonnes of sugar annually with local consumption of 360,000 tonnes

From the production 360,000 tonnes are consumed locally with the surplus which has now grown to 170,000 tonnes exported within East Africa, Comesa and DR Congo.

With the hiccups hindering the export market in the East Africa Community, Uganda Manufacturers are seeking new markets in South Sudan, Ethiopia, Zambia and Eastern DR Congo.

But all seems not be lost as both Tanzania and Kenya have been recently reported to have entered into trade agreements with Uganda for purchase of the commodity.

In May last year, Tanzania temporarily opened its borders for Uganda sugar allowing 30,000 metric tonnes for the start.

Meanwhile in Kenya, the government lifted its ban on Uganda’s sugar imports in December 2020 indicating that it will annually purchase up to 90,000 tonnes of refined sugar.

It was also agreed that the Kenyan government would immediately post trade facilitation officers within Uganda to gather information, monitor, and confirm that the exports into Kenya are wholly obtained from the country’s factories.

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.

Mr Jim Kabeho, the Uganda Sugar Manufacturers Association chairman claims that Kenya has not issued any permits for the sugar imports yet.

“We have not received permits for the 90,000 tonnes consignment or even discussed anything in that regard,” he said, “When Kenya provides the permits, it is then that we will be able to talk with certainty. Otherwise, we cannot celebrate yet.”

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