Report: Uganda does not have sugar for export

Uganda does not have enough sugar to sweeten the tea of its citizens, let alone export to neighbouring countries, a new report has revealed.

The report commissioned by the East African Community’s Directorate of Customs and Trade in July 2015 shows Uganda produced 294,419 metric tonnes (MT) of sugar in 2014 against its consumption requirement of 314,150 MT.

The revelation comes against the backdrop of a heated exchange between the Opposition and the ruling Jubilee coalition over the alleged planned sugar imports from Uganda.

The Coalition for Reforms and Democracy has vehemently opposed the alleged deal between President Uhuru Kenyatta and his Ugandan counterpart Yoweri Museveni, arguing that it would hurt Kenyan sugar-cane farmers and industries.

The Standard is in possession of the draft report that is ready to be presented to all the five EAC countries of Kenya, Uganda, Tanzania, Rwanda and Burundi.

“The Ugandan production in 2014 was 294,419 MT against a consumption of 314,150 MT while in 2009 the production was 279,852 MT against a consumption of 345,592 MT,” Eliazar Muga, Managing Director and Regional Integration and Trade consultant at MAP Advisory Services, who was part of the team undertook the survey, said.

He added: “It is not possible to say that Uganda has a surplus to be exported to Kenya considering that it has also requested for a Stay of Application of Common External Tariff.”

Dubbed ‘Comprehensive Study and Strategy of the Sugar Industry in the East Africa Community, a Technical Assistance to the FTA Negotiations’, the report by a team of experts from all the five states reveals Uganda has a sugar deficit.

The report was commissioned by the Tripartite Co-ordination Unit on behalf of the EAC Partner States to assist the EAC states in their preparations for negotiations concerning sugar tariff liberalisation/market access offers to EAC, Common Market for Eastern and Southern Africa and Southern African Development Community.

Overall, the annual EAC sugar production averaged 1,088,530 tonnes, out of which an average of 132,242 tonnes was exported, leaving the balance as supply of home-grown sugar averaging 956,288 tonnes, Muga said.

“Compared against annual sugar consumption of 1,546,598 tonnes, it means the EAC faced a home-grown sugar deficit averaging 590,310 tonnes which was partly filled by imports averaging 519,170 tonnes per annum,” he said.

Muga, one of the experts who negotiated the Economic Partnership Agreements within the European Union-EAC framework that was signed last year in Brussels, said production of sugar in the three EAC partner states, especially in Uganda, was on the decline, a factor that necessitated the study.

Sugar, rice and milk are some of the commodities that are protected under the EAC Customs Union arrangement and which can be exported or imported under the application of taxes, that is, the Common External Tariffs.

CHEAP IMPORTS

The MAP report shows EAC was a net sugar importer to the tune of 386,929 tonnes per annum between 2005-2014.

EAC exported an average of 169,728 tonnes annually during the same period.

Kenya barely exported its sugar during the period. “In terms of EAC sugar imports, Kenya dominates with a share of 39 per cent of total EAC sugar imports per annum during 2005-2014. Tanzania and Uganda follow Kenya with shares of 29 per cent and 22 per cent, respectively while Rwanda accounts for eight per cent and Burundi two per cent of annual EAC sugar imports,” the report says.

Busia Senator Amos Wako said yesterday that Uganda could have been planning to import sugar cheaply and sell it to Kenya.

“Since Uganda does not have a surplus, it cannot export. We fear sugar from Brazil and other foreign countries will find its way into Kenya’s market should we allow importation of sugar from Uganda,” he said.

The report reveals sugar consumption in the EAC is high and rising.

“Kenya consumed the largest volumes averaging 772,203 tonnes per annum and accounted for 49.9 per cent of all EAC sugar consumption, 1,546,598 tonnes per annum during 2005-2014,” the report says.

“Tanzania, Uganda, Rwanda and Burundi in that order consumed the remainder shares of 25.6 per cent (395,860 tonnes), 19.3 per cent (298,252 tonnes), 3.5 per cent (53,363 tonnes) and 1.7 per cent (26,921 tonnes per annum), respectively.”

The report, which estimates that there are an estimated 250,000 smallholder sugar-cane farmers in Kenya, argues that use of smallholders in sugar production is uneconomical as it does not realise the economies of scale that make countries such as Sudan, Brazil, and Cuba some of the world’s largest producers.