Uganda could reap from Rwanda, Tanzania's demand for sugar

The chairman of the council of ministers, Harrison Mwakyembe

 Ugandan and Kenyan sugar producers have a chance to reap from the huge demand from their regional neighbouring states of Tanzania and Rwanda.

 

This follows the East African Community (EAC) Council of Ministers' decision to permit the two member states of Tanzania and Rwanda to import 100,000 and 70,000 tonnes respectively.

 

The chairman of the council of ministers, Harrison Mwakyembe, in an EAC Notice said: "Rwanda and Tanzania should give first priority by sourcing sugar from partner states that have excess production."

 

According to the notice, Tanzania sugar imports within the region will attract a duty rate of 50 per cent instead of 100 per cent while Rwanda was cleared to import at 25 per cent for a period of one year.

 

The council also imposed other conditions aimed at protecting the sugar industries of other EAC economies, including Kenya, Uganda and Burundi.

 

"During the period of stay of application of CET (common external tariff), sugar from Rwanda and Tanzania will attract CET rates when exported to other partner States," Harrison Mwakyembe said in an EAC gazette notice.In an interview with Daily Monitor yesterday, Jim Kabeho, the president of Uganda Sugar Millers Association, said Uganda has surplus production to feed export markets.

 

Annually, six established Uganda sugar manufacturers have a capacity to produce 373,000 metric tonnes of sugar of which, 70,000 metric tonnes is consumed locally and the rest is exported to South Sudan, Rwanda and Tanzania.

 

The manufacturers are Kakira Sugar Works Ltd, Kinyara Sugar Works Limited, Sugar and Allied Industries Limited, and Sugar Corporation of Uganda Limited, Sango Bay Estates Limited and Mayuge Sugar Industries Limited.

 

Statistics from Uganda Sugar Manufacturers Association show that Uganda exported 31,767 metric tonnes of sugar to Kenya in 2012, about 7000 metric tonnes to South Sudan and 11,954 to Rwanda.

 

In March, this year   the government had officially announced that it intended to license importation of 88,940 tonnes of direct consumption sugar for sale in the country to fill in the foreseen deficit of supply of the commodity in the financial year ending June 30, this year.

 

The public notice was issued by the Sugar Board of Tanzania (SBT). The Board insisted that prior to the issuance of the licence, there would be a separate agreement whereby importers are required to commit themselves to distribute the imported sugar at a price not exceeding 1,650/- per kilo at wholesale.

 

Moreover, it directed that sub-wholesalers shall trade the sugar acquired from wholesalers at a price not exceeding 1,750/- per kilo, while retail prices shall not exceed the current levels of between 1,800/- and 2,000/-.

 

According to the notice issued by SBT Director General,   Henry Semwaza, maximum allocation of sugar for any importer will be 5,000 metric tonnes, which is subject to volume and quality of applications.

 

The imported sugar will be sold in Tanzania for direct consumption only (non-industrial) and must conform to the Tanzania Bureau of Standards (TBS) and Tanzania Food and Drugs Authority (TFDA) standards.

 

"Goods will be inspected on arrival. Non-conformity of the sugar to the specifications set herein shall amount to noncompliance of the terms and conditions of the licence," the DG stated in the notice circulated on various media houses.

 

The notice further noted that no consignment will be accepted for clearance if it arrives later than May 31, this year and all licences for importation shall be deemed cancelled after expiry of the set date.

 

Semwaza said that the importation shall be governed by the provisions of the Sugar Industry Act, 2001 and Sugar Regulations, 2010 relating to importation of sugar.

 

"An import levy of 3 US dollars per tonne shall be applicable. The issue of partial import tariff remission is under consideration by the government," the SBT boss explained in the notice, adding that it is the responsibility of importers to pay all applicable taxes.

 

"All successful applicants shall be required to enter into a Sugar Import Agreement with the SBT.

 

The Agreement shall, among other things, bind the importer to perform the importation of sugar at the specified time and quantity and further distribute the imported sugar at the set price," the statement stipulated.

 

The sugar regulatory and licensing body chief warned that it will be an offence for applicants to assign import licences to third parties.

 

SBT also directed importers to submit on monthly basis, information regarding quantities and quality of sugar imported, the manner in which the sugar has been, is being or will be disposed of, stocks held and the place(s) where such stocks are held.

 

Parliamentary Public Accounts Committee Chairman Zitto Kabwe told the journalists  in Dar es Salaam that he has been frequently insisting that producers must not be given exclusive right to import because that is against fair competition.

 

He pointed out that if producers are allowed to deal with importation, then it was obvious that they will concentrate on bringing in the commodity instead of focusing at production.

 

The firebrand MP representing Kigoma North noted that it is out growers who will suffer the consequences. He cited the sugar crisis in Kenya where the Mumias Sugar Company is embroiled in a big scandal now because they were allowed to import and hence stopped producing.

SOURCE: THE GUARDIAN