Arua, Uganda: West Nile Growers Cooperative Union in Arua is struggling to sell off over 6,000 metric tons of tobacco harvested this season, thecooperator has established.
The Dilemma follows the Union’s decision to cancel the contract of its longstanding customer Continental Tobacco Uganda Ltd, after the latter failed to pay the union’s 9,000 farmers for tobacco it took last year worth Shs.7.5b.
Speaking to theCooperator on Friday, the Union Manager, Mr. Moses Itukebo said that the last two seasons had been plentiful for the Union, leaving them struggling with finding a market. This year alone, the union has in stock over 6,000 metric tons of tobacco worth Shs.6billion, from 4,500 farmers affiliated to the union. “The challenge we have now is finding an alternative market after parting ways with Continental Tobacco Uganda Ltd,” he said.
He said that the Union had dragged Continental Tobacco Uganda Limited to court over the unpaid dues, and they had agreed to an out of court settlement. “When our lawyers wrote to them threatening to sue, they wrote back and paid an advance of shs500m, leaving them with a balance of shs6.5 billion that they have promised to pay in installments over time,” explained Itukebo.
Other market players in West Nile include Alliance One International (AOI) that took over from British American Tobacco, and Global Leaf Pool (GLP) Ltd that Itukebo says has a small purchasing power.
Last year, Uganda earned over Shs.18 billion from tobacco sales, making it one of the highest agricultural export earners for the country.