Sweet taste for consumers, bitter loss for sugarcane farmers

Consumers are enjoying the lowest retail price for sugar in five years, with a kilo now costing Shs3,500 in many shops in Jinja town, down from Shs4,500 at the beginning of the year.

A 50kg bag of sugar now costs 150,000 shillings, down from 250,000 shillings in December last year.

Despite this decline, farmers have been refusing to supply sugarcane to the millers for almost two weeks, protesting the fall in raw cane prices, which have fallen to Shs100,000 from Shs240,000 in December last year.

This has left most sugar factories in Busoga sub-region and the neighbouring districts of Buikwe and Mukono without sugarcane, strengthening the determination of farmers to have their demands met.

The farmers are lobbying the government to amend the law and place them under the Ministry of Agriculture, Animal Industries and Fisheries instead of the Ministry of Trade, Industry and Cooperatives, which they accuse of siding with investors. They also want a ban on weighbridges, among other concessions.

Mr Jim Kabeho, Chairman of the Uganda Sugar Manufacturers’ Association, said over the weekend that sugar prices fluctuate because it is an agricultural product.

“Sugar is not a manufactured product but an agricultural product, which fluctuates like matooke (plantain), the bunch of which now costs Shs3,000 in Mbarara,” said Mr Kabeho.

He added that sugarcane, the main raw material for sugar, is sensitive to price fluctuations depending on the season.

Mr Isa Budhugo, Chairman of the Uganda Sugarcane Growers’ Association, said the drop in sugar prices should not lead to a reduction in sugarcane prices as sugar is not the only by-product.

“Millers extract products such as molasses, ethanol, biogas and fertilizers from sugarcane, prices for which remain high,” he said.

According to him, millers do not suffer losses if sugar prices fall, because sugar is just one of the many by-products of sugarcane. He stressed that reducing sugar prices is unnecessary when farmers are already suffering losses with the current sugarcane prices.

Mr Kenneth Barungi, a sugar industry consultant, attributed the fall in sugar prices to a drop in raw material costs.

“When sugarcane prices fall, sugar prices follow. Conversely, high sugarcane prices push sugar prices up,” explained Mr Barungi, former Deputy General Manager of Kakira Sugar Limited.

He also noted that an oversupply of sugar compared to demand could push prices lower. He warned that sugar prices could rise again if imports fall due to factors such as harsh climatic conditions, increased demand for biofuels or reduced imports from outside the East African Community (EAC) region.

Mr David Christopher Mombwe, General Secretary of the Busoga Sugarcane Growers’ Association, attributed the low sugar prices to sugar smuggling into Uganda.

“The smuggling of sugar from other countries into Uganda contributes to the low prices for both sugar and sugarcane,” he said.

He opposed the import of sugar from Brazil, stating that there are many sugar factories in Uganda.

Mr Mombwe also pointed out that unripe sugarcane, which is supplied to millers after nine to ten months, produces poor quality sugar, which affects market prices and export volumes.