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Sweet taste for consumers, bitter loss for cane farmers
A farmer cuts sugarcane in Buyende District at the weekend. Low prices of raw cane has contributed to a fall in prices of sugar. PHOTO | TAUSI NAKATO
What you need to know:
- The sugar price drop has led to significant unrest among sugarcane farmers, who have stopped supplying cane to millers for nearly two weeks in protest.
Consumers are enjoying the lowest retail price for sugar in five years, with a kilogramme now costing Shs3,500 in many shops in Jinja City, down from Shs4,500 early this year.
Similarly, a 50-kilogramme bag of sugar now costs Shs150,000, down from Shs250,000 last December.
Despite this drop, farmers have refused to supply sugarcane to millers for nearly two weeks, protesting the decrease in raw cane prices, which have fallen to Shs100,000 from Shs240,000 last December.
This has left most sugar mills in the Busoga Sub-region and neighbouring districts of Buikwe and Mukono without sugarcane, reinforcing the farmers’ determination to have their demands met.
The farmers are lobbying for the government to amend the law to place them under the Ministry of Agriculture, Animal Industry, and Fisheries instead of the Ministry of Trade, Industries and Cooperatives, which they accuse of siding with investors. They also want a ban on weighbridges, among other concessions.
Mr Jim Kabeho, the chairperson of the Uganda Sugar Manufacturers’ Association, at the weekend said sugar prices fluctuate because it is an agricultural product.
“Sugar is not a factory product but an agricultural one, which fluctuates just like matooke (plantain) whose bunch is now at Shs3,000 in Mbarara,” Mr Kabeho said.
He added that sugarcane, the main input for sugar, is susceptible to price fluctuations depending on the season.
Mr Isa Budhugo, the chairperson of the Uganda Sugarcane Growers’ Association, argued that the fall in sugar prices should not lead to a reduction in sugarcane prices because sugar is not the only by-product.
“Millers get products like molasses, ethanol, biogas, and fertilizers from cane, whose prices remain high,” he said.
According to him, millers do not suffer losses when sugar prices drop because sugar is just one of many by-products of sugarcane. He emphasised that reducing sugar prices is unnecessary when farmers are already incurring losses with current sugarcane prices.
Mr Kenneth Barungi, a consultant in the sugar industry, attributed the drop in sugar prices to a decrease in raw material costs.
“When cane prices drop, sugar prices follow suit. Conversely, high cane prices drive up sugar prices,” Mr Barungi, former Deputy General Manager of Kakira Sugar Limited, explained.
He also noted that an oversupply of sugar compared to demand could lower prices. He warned that sugar prices might rise again if imports decrease 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, the general secretary of the Busoga Sugarcane Growers’ Association, attributed the low sugar prices to sugar being smuggled into Uganda.
“Smuggling sugar from other countries into Uganda is contributing to low prices for both sugar and sugarcane,” he said.
He argued against importing sugar from Brazil, citing the abundance of sugar factories in Uganda.
Mr Mombwe also pointed out that immature sugarcane, supplied to millers at nine to 10 months, produces poor quality sugar, affecting market prices and export volumes.
