Uganda’s sugar exports to Kenya drop as Rwanda leads in EAC
Data from the Uganda Revenue Authority [URA] shows that Rwanda has now surpassed Kenya as Uganda’s largest sugar export market in the East African Community
KAMPALA, October 7, 2024 — Uganda’s sugar exports to Kenya have decreased by 16.2 percent to just 18 metric tonnes in the last nine months to September 2024. Authorities attribute this drop to ongoing trade disputes between the two East African neighbours.
Data from the Uganda Revenue Authority [URA] shows that Rwanda has now surpassed Kenya as Uganda’s largest sugar export market in the East African Community [EAC]. In the nine months leading to September 2024, Rwanda imported 33.3 percent [39.3 tonnes] of the 111.1 tonnes of sugar Uganda exported to the EAC. Tanzania follows as the second-largest market for Uganda’s sugar, with South Sudan in third place.
State Minister for Industry, David Bahati highlighted that the decline is primarily due to frequent policy changes by Kenya and a restrictive permit issuance regime. “These policy changes have hindered our market access and created unnecessary tensions between us,” Bahati noted.
He added, “We’re working closely with our Kenyan counterparts to ensure seamless trade and address the challenges facing our sugar exporters.” Uganda can export between 120,000 and 150,000 metric tonnes of the sweetener to Kenya annually.
Recently, Kenya’s Cabinet Secretary for Agriculture and Livestock Development, Andrew Karanja, stated that the limitations on Uganda’s sugar exports are intended to protect the domestic market. Projections suggest that at least 16 local Ugandan factories could produce over 800,000 metric tonnes of sugar this year, sufficient to meet Kenya’s average annual consumption of approximately 950,000 metric tonnes.
According to trade regulations, sugar from the Common Market for Eastern and Southern Africa (COMESA) and the EAC should not be banned from entering the Kenyan market. However, Kenya has accused Uganda of repackaging sugar from non-member countries for export, a claim that Uganda disputes.
In response to the decline in sugar exports, Uganda is actively seeking alternative markets and diversifying its products by adding value to brown sugar. Producers like Kakira Sugar Works, and Sugar Corporation of Uganda Limited [SCOUL] have also begun producing ethanol for green energy. “We’re developing a regulation to allow power generated by sugar millers to be connected to the national grid,” Bahati stated.
Jim Kabeho, Chairman of the Uganda Sugar Manufacturers Association, noted the difficulties faced in exporting sugar to Kenya. Established sugar companies in Uganda, including GM Sugar Uganda Limited, Kakira Sugar Works, Kinyara Sugar Works Limited, Sango Bay Estates Limited, and the Sugar Corporation of Uganda Limited, continue to operate alongside several small licenced manufacturers.
In 2022, Uganda’s national sugar production was estimated at 600,000 metric tonnes, with domestic consumption around 380,000 metric tonnes, leaving about 220,000 metric tonnes available for export. Projections for 2022 indicated a potential production of 822,000 metric tonnes, with approximately 720,000 metric tonnes designated for brown table sugar and about 102,000 metric tonnes for white industrial sugar.
https://thecooperator.news/cane-union-drags-kinyara-sugar-to-court-over-disruption-of-operations/
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