Masindi Sugar Cane Out growers Association Ltd (MASGAL), the biggest supplier of sugar cane to Kinyara Sugar Works Limited, has rejected the new cane price offered by the sugar manufacturing giant.
A notice issued by Kinyara Sugar Ltd on July 1, 2020, indicates that the new cane price for the 2020/2021 financial year will be Shs 91,586 per tonne of sugarcane sold by the out growers, down from the previous price of Shs 108,200 shillings per tonne.
However, Cosmas Byaruhanga, the Chairman MASGAL who is also Masindi District LCV Chairman, has rejected the new price, urging sugarcane out growers not to sell their sugarcane to Kinyara until the organisation’s board sits to make a final decision in a week’s time.
Byaruhanga, who has vowed to petition President Yoweri Museveni to intervene in the dispute, says the sugar giant is exploiting the COVID-19 pandemic to offer a lower price for cane.
“Kinyara is taking advantage of COVID-19 to reduce the price. COVID-19 never affected sugar factories. Even a bag of sugar is at Shs 150,000 as it was before COVID-19 came in,” Byaruhanga argued.
Currently the MASGAL boss is running announcements on local radio stations advising sugar cane farmers to allow Kinyara Sugar Limited to harvest cane but to not to accept tallying.
A section of MASGAL zonal Chairpersons has also written to the Resident District Commissioner seeking permission to hold consultative meetings with their farmers about the new price.
The zonal Chairpersons, led by Kanaginagi Ateenyi, too insist that no tallying should be done at Kinyara Sugar factory, until a consensus has been reached.
The current feud over prices is only the latest in a longstanding rift between Kinyara and the out growers’ association.
In 2018, sugarcane farmers in Masindi district under MASGAL suspended supply of cane twice to Kinyara Sugar Limited over variability of sugar prices.
The suspension was announced after the sugar company cut the price of a tonne of sugarcane from Shs 141,000 to 82,000, citing low demand for sugar across the country. The company justified its proposed reduction in the price of cane as necessary in order to manage the then prevalent market situation.
At the time, Kinyara Sugar Limited General Manager in Masindi district, Ramadasan Vekatraman, revealed that the company was stuck with 17,250 tonnes of sugar due to low demand, an outcome he blamed on government’s failure to control sugar imports.
As a result, Ramadasan said, Kinyara Sugar had been forced to reduce the price of a 50-kilogramme bag of sugar to Shs 125,000 down from Shs 198,000, adding that the nationwide problem had greatly reduced the company’s profit margin.
However, the farmers vehemently opposed his proposal saying they could not accept a cut in the price of sugarcane when the cost of producing sugarcane had shot up. They then resolved to suspend supplying sugarcane to Kinyara Sugar Factory and advised the company to also close shop until the sugar price stabilizes.
Since 2018 MASGAL and Kinyara have been operating on an interim price since the two entities have failed to agree on a stable price for the cane. MASGAL has over 7000 members and is one of the biggest suppliers of cane to Kinyara sugar Limited.