Beleggen in suiker

[nobody]

Western Kenya sugar companies to raise cane prices to US$39.5 per ton

KENYA—All four millers in the former Western province have announced that cane prices will rise from Sh5,000 (US$ 32.64) and Sh5,500 (US$ 35.90) to a fixed cost of Sh6,050 (US$ 42.43) on December 1, following the resumption of milling.

This communication by the West Kenya Sugar Company, Butali Sugar Mills, Nzoia Sugar, and Mumias Sugar Company comes ahead of their scheduled milling activities set to resume next week.

This decision follows the lifting of a four-month moratorium by the Agriculture and Food Authority.

The government, through AFA, had halted sugar milling across the country in June due to a lack of raw materials and to allow cane to mature.

After the suspension, enterprises such as West Kenya utilized the downtime to perform repairs on three of its factories to enhance efficiency, as stated by George Muruli, the head of communication and community engagement.

This adjustment in cane pricing is not unprecedented for these corporations.

In April, West Kenya Sugar, the manufacturer of the Kabras sugar brand, increased its cane price from Sh5,250 (US$34.27) to a record Sh5,500 (US$35.90) per tonne, according to a local daily newspaper, The Standard.

This review coincided with announcements by competitors Mumias Sugar Company and Butali, offering fresh prices of Sh5,250 (US$34.27) and Sh5,200 (US$33.94), respectively, to their farmers for a ton of sugarcane.

Initially, the three major players in the sector were paying an average of Sh4,500 (US$29.37) per ton in the past couple of months until the commodity became scarce.

This pricing strategy was implemented to entice cane growers to sell their cane to corporations offering better prices due to limited raw material supplies.

Mr. Muruli also highlighted that West Kenya also provided incentives such as subsidized farm inputs and transportation of cane from farms to millers.

The entry of Mumias Company into the industry is expected to boost competitiveness.

Despite facing payment issues and a troubled past with former contracted farmers, Mumias, which had shut down, is poised to bring about a new dynamic in the market.

Mumias Sugar faced financial challenges starting in the 2012/2013 fiscal year, accumulating net losses and eventually folding at the end of 2018, with losses amounting to Sh39.44 billion (US$257.44 million).

As of June 2018, the company’s borrowing, principal loans, and interest payments from government sources totalled Sh12.59 billion (US$82.18 million).

Mumias Sugar Company, before closing in 2019, had a daily capacity of 2,000 tons of cane and an inherent capacity of 8,400 tons, boasting the largest cane-growing nucleus in the country, covering 4,000 hectares.

https://www.foodbusinessafrica.com/west ... 5-per-ton/

[nobody]

Revived Mumias Sugar Company commences operations, promises support to farmers

KENYA – The Mumias Sugar Company marked a significant milestone on Friday as it reopened its doors to receive cane from farmers, signalling the commencement of operations in the once-thriving miller.

The move follows a strategic revival effort to breathe life back into the company that had faced financial challenges in recent years.

In the next two weeks, the company plans to release sugar into the market, subject to compliance tests by various agencies, including the Kenya Bureau of Standards.

The management said it has already recalled 787 former employees, with additional staff expected to join, particularly in the sugar packing area.

Stephen Kihumba, the manager in charge of operations and administration, revealed plans to engage more former employees on a need basis, with opportunities anticipated in the Cogen and Ethanol plant.

Kihumba assured farmers that the miller would promptly pay for the cane supplied, emphasizing Mumias Sugar Company as a promising entity to watch.

He encouraged farmers to plant sugarcane and emphasized harvesting mature cane, which has reached 16 months, to maximize benefits in terms of weight and sucrose content.

Setting the price for a tonne of sugarcane at Kes6,050 (US$39.5), Mumias Sugar Company’s pricing strategy has prompted other millers to adjust their prices, ultimately benefiting farmers.

The Agricultural and Food Authority has directed the company to crush 2,500 tons of sugarcane per day for the next two months, after which further capacity decisions will be made based on regional surveys.

The miller, operating in the lower Kakamega region alongside Kibos Sugar Company and Olepito, aims to support local farmers by ensuring that the received cane is exclusively from within the region.

Kihumba disclosed that the company has planted sugarcane on 1,400 hectares of its 3,400 hectares’ nucleus land and plans further expansion. He emphasized the importance of cane development for the sustained success of the company.

Expressing gratitude to the government for their support, Kihumba underscored the collaborative efforts that facilitated the company’s revival.

The management pledged to increase freight support, deploying additional tractors to aid in transporting sugarcane as more farmers align with the miller.

The Company’s reawakening signifies a positive turn for the Kenyan sugar industry, promising employment opportunities, prompt payments, and increased support for local farmers, while contributing to the economic growth of the region.

Last week, a Nairobi court ruling paved way for Uganda’s Sarrai Group to resume full control of the factory, ending a prolonged lease war surrounding the Kenyan sugar producer.

The court’s decision is expected to provide the stability needed for Sarrai Group to contribute to the restoration of the once-flourishing sugar miller.

https://www.foodbusinessafrica.com/revi ... o-farmers/

[nobody]

Tanzania inaugurates Mkulazi Sugar Factory to help alleviate sugar shortage

TANZANIA – The Sixth Phase Government of Tanzania, led by President Samia Suluhu Hassan Tanzanian government has inaugurated the Mkulazi sugar factory to help the nation meet its demand for sugar.

Realized through a collaborative effort between the National Social Security Fund (NSSF) and the Prison Corporation Service (SHIMA) the factory is also expected to significantly improve the economic fortunes of Tanzania.

“Having completed rigorous testing and commissioning, the factory is scheduled to commence at the end of December, marking a pivotal moment for Tanzania,” said Cyprian Luhemeja, the Permanent Secretary in the Prime Minister’s Office.

Luhemeja emphasized that the construction of the factory represents a significant step forward for the nation.

He lauded the National Social Security Fund’s role in this endeavour, highlighting the creation of 11,000 new direct jobs as a testament to the positive impact on employment.

The Mkulazi factory, in its initial phase, is projected to have a production capacity of 50,000 metric tonnes of sugar, with plans to escalate this figure to 75,000 metric tonnes per year.

The government sees this development as a revolutionary initiative, reflecting favourable policies that encourage the fund to invest in productive sectors, thereby fostering economic development.

The Tanzanian government’s commitment to addressing the sugar shortage crisis is evident in its ongoing efforts. Earlier this year, plans were unveiled to construct mini-processing facilities for sweetener production within the country.

Prof Frederick Kahimba, the director general of Temdo, highlighted the necessity of small-scale processors to complement existing large-scale plants in meeting the domestic demand for sugar.

Presently, the country relies on four main factories – Kagera Sugar Ltd, Kilombero Sugar, Mtibwa Sugar Estates Ltd, and TPC Ltd – which collectively produce approximately 370,000 tonnes of sugar annually. However, this falls short of the domestic demand of around 670,000 tonnes.

The Tanzanian government, led by the ruling political party, has set an ambitious target to become self-sufficient by producing 700,000 tonnes of sugar by 2025.

The commitment to the sugar industry’s growth is further underscored by recent announcements, such as TPC’s plan to invest $45 million in constructing a molasses plant.

This strategic move aims to strengthen the sugar value chain in Tanzania, aligning with the overarching goal of achieving self-sufficiency and addressing the sugar shortage by 2025.

https://www.foodbusinessafrica.com/tanz ... -shortage/

[nobody]

Private fund injects billions into South Africa’s Sugar Industry as government extends sugar diversification plan

SOUTH AFRICA – In a strategic move aimed at revitalizing the sugar industry in the South African Development Community (SADC), the Fund for Sustainable Sugar Industry Development in Africa (FSID), backed by US-based private equity firm Lusitania Investment Capital, has secured an impressive R18.8-billion for strategic partnerships within the sugar sector.

The investment is set to enhance the industry’s capabilities by the end of the 2024/25 fiscal year.

Lusitania, through FSID, has set aside substantial investments of R9.5-billion in Angola and R6.6-billion in Mozambique, with plans to acquire Tongaat Hulett’s Mozambican business, including its liabilities and debts.

The FSID, in alignment with its objectives, aims to promote the cultivation of high-value commodity crops, employ sustainable food production methods, and enhance overall efficiency within the industry.

While the fund focuses on creating, consolidating, and expanding the industry’s presence, it also aims to encourage innovation, thereby creating investment opportunities that strengthen the sugar value chain.

Luis Revés, a representative of Lusitania and FSID, emphasized the potential benefits of their proposal for Tongaat Hulett, stating; “it will be a substantial financial income for South African operations, its liabilities, and the restructuring plan, while significantly reducing the current group’s debt”

However, the proposal faced challenges as it was rejected by Tongaat Hulett’s board in June 2022. Despite this setback, FSID managed by Zambezi Golden Assets is forging ahead with its investment plans, looking to invest nearly US$2.8 billion in the SADC region by the end of the 2024/25 fiscal year.

Delays in some merger and acquisition processes have been attributed to third-party involvement and electoral events in certain African countries.

Diversification key to industry revival

In parallel, the South African Sugar Association (SASA) is working closely with the government and other industry stakeholders to address challenges in the local sugar industry.

The expiration of Phase 1 of the Sugarcane Value Chain Master Plan to 2030 prompted the government to grant a two-year extension, allowing industry players to restructure and diversify.

SASA Executive Director Trix Trikham highlighted the need for diversification to mitigate the negative impacts of the Health Promotion Levy (HPL), commonly known as the Sugar Tax, introduced in 2018.

The sugar industry faced significant job losses, mill closures, and a substantial revenue decline. “To address youth unemployment, SASA introduced the Youth Placement Programme (YEP), allocating R5.2 million annually since 2018,” stated Trikham.

As part of the Sugarcane Master Plan, SASA is exploring diversification opportunities, including bioethanol, cogeneration, food additives, and bioplastics, leveraging sugar cane’s flexibility to produce various products.

Trikham acknowledged the challenges in existing diversification plans and urged the government to collaborate with the industry to navigate critical issues and align with the objectives of the Sugarcane Master Plan.

The simultaneous efforts by the private sector, represented by FSID, and the government-led initiatives underline a comprehensive approach to address challenges and ensure the sustainable growth of the sugar industry in the SADC region.

As these strategies unfold over the coming years, they hold the potential to reshape the industry landscape and drive economic development in the region.

https://www.foodbusinessafrica.com/priv ... tion-plan/

[nobody]

West Valley Sugar Company set to boost Kenya’s sugar industry as operations commence in US$18.25M milling plant

KENYA – West Valley Sugar Company has officially commenced its sugar milling operations in Kericho County, marking a significant boost for the country’s sugar sector amid increasing sugar demand in the country.

The newly established West Valley Sugar Factory, situated in the Kapkornom area within the Soin/Sigowet constituency, boasts a daily milling capacity of 1,250 tonnes, signalling a promising era for the local sugar industry.

This venture, the first of its kind in Kericho, features cutting-edge technology, including automated machinery and a robust quality control system to ensure the production of high-quality sugar products.

West Valley Sugar Company, a subsidiary of Kipchimchim Group of Companies, is no stranger to the business world, with its successful retail chain, Kipchimatt supermarkets, under its umbrella.

Kipchimchim Group Managing Director, Benard Soi, shared insights into the company’s commitment to supporting local farmers. Currently purchasing sugarcane from approximately 7,500 small-scale farmers in the region at Ksh 6,010 (US$39.18) per tonne, the company is actively contributing to the economic upliftment of the farmers.

Initially equipped to crush 1,250 tonnes of sugarcane per day, the West Valley Sugar Factory has ambitious plans to double its capacity to 2,500 tonnes per day.

This expansion not only promises increased sugar production but also aims to benefit various sugar belts in the region, including Soin-Sigowet, Ainamoi, Kipkelion, Tinderet, Muhoroni, and Nyando.

To enhance cane production further, the company has launched a cane development program, providing farmers with essential inputs such as seeds and fertilizers. According to Mr. Soi, this initiative is expected to significantly boost production over the next one to two years.

Utilizing advanced automated technology imported from India, the sugar miller is not only ensuring efficiency but is also generating its own three-megawatt power to sustain its operations.

The strategic location of the factory aims to alleviate the challenges faced by cane farmers in Kericho, Nandi, and Nyando regions, who have struggled with high transportation costs to distant sugar factories.

West Valley Sugar Company has already registered 3,800 farmers in Soin/Sigowet, Ainamoi, and Tinderet constituencies, covering a cumulative 10,000 acres of cane.

Beyond the factory gates, the project is set to create over 1,000 direct employment opportunities and an additional 6,000 indirect employment opportunities, thereby contributing significantly to the local economy.

As West Valley Sugar Company starts operations, the sugar industry anticipates a major boost hoping to meet the increased demand for the sweetener.

The opening comes in time after the government lift the ban on millers, previously put in place to prevent millers from crushing immature cane.

The government also obtained a two-year extension from COMESA on import control as it embarks on a trajectory to stabilizing the sugar industry.

https://www.foodbusinessafrica.com/west ... ing-plant/

[nobody]

Nzoia Sugar Company resumes operations after 21-month closure

KENYA – Nzoia Sugar Company, a key player in the Kenyan sugar industry, has finally resumed operations after a 21-month closure caused by the lack of mature cane, bringing relief to over 67,000 sugarcane farmers initially supplying cane to the company.

During the reopening ceremony, Bungoma County Governor Kenneth Lusaka said, “I apologize that you had to go for 21 months without your source of income. It is not an easy thing considering the harsh economic times in the country. We hope that all will go well.”

Governor Lusaka emphasized the difficulties faced by the farmers during the harsh economic times and expressed hope for a smooth transition back to regular operations.

He urged all stakeholders involved in Nzoia Sugar Company to collaborate in order to stabilize the factory.

He also called upon politicians to set aside their differences and work together to find lasting solutions for the sugarcane farmers in the region.

Additionally, Lusaka shed light on why Nzoia Sugar was excluded from the leasing plan stating, “Among the parastatals that had been suggested to be leased was Nzoia Sugar Company but it was removed from the list after leaders and farmers piled pressure that it should not be leased.”

However, as the sugar factory resumes milling, employees have given the management a one-month ultimatum to clear their 21 months’ worth of pay.

Bernard Wanyonyi, the chairperson of the workers, accused the factory management of taking too long to settle the dues owed to them, affecting their ability to provide for their families, access quality healthcare, and pay rent.

Wanyonyi disclosed that despite reports of a payment plan, the company has yet to decide whom to prioritize as it faces debts to both farmers and employees.

The situation at Nzoia Sugar Company mirrors the challenges faced by Mumias Sugar Company, which also recently resumed operations after a closure from July 13 to November 30, 2023, due to insufficient mature cane.

Mumias Sugar’s promise to pay farmers promptly and the set price of Kes 6,050 per tonne of sugarcane are positive signs for the industry, but challenges persist.

https://www.foodbusinessafrica.com/nzoi ... h-closure/

[nobody]

Egyptian government extends sugar export ban amidst supply shortages and price surge

EGYPT – The Egyptian government has taken decisive action by extending the ban on sugar exports for an additional three months, as reported in the Official Gazette on Thursday.

According to the report, the only exception to the ban is for surplus quantities, a move aimed at addressing the ongoing challenges in the sugar market.

This decision follows a recent announcement by the General Authority for Supply Commodities, which unveiled plans to import 50,000 tons of raw sugar through a tender.

The sugar supply gap has not only led to soaring prices but has also resulted in a shortage of unsubsidized sugar in various stores across Egypt.

The sugar export ban was initially extended in September, with the exception of quantities deemed surplus to the local market’s needs. However, the persistence of supply challenges prompted the government to prolong the ban further.

In an attempt to stabilize the sugar market, Egypt introduced the trading of sugar on the Egyptian Mercantile Exchange platform (EME) on August 17.

EME Chairman, Ibrahim Ashmawy, reported the sale of 5,000 tons of sugar at a price of 24.5 thousand tons. Despite this initiative, the sugar market continued to face difficulties, contributing to the current shortage.

The situation intensified last week when the advisor to the Egyptian Minister of Supply and others were arrested in connection with a large-scale corruption network scandal.

Following these arrests, the markets experienced a notable relief in sugar stocks and prices. The basic commodity began to reappear in markets with prices ranging between 27 pounds and 38 pounds.

Recently, the Egyptian Ministry of Supply and Internal Trade announced plans to increase the rations of subsidized sugar distributed to families to cushion against the increasing prices.

In a statement, the ministry said it has raised the amounts of subsidized sugar distributed through ration cards, which cater to different family sizes.

Families with up to three individuals will now receive an additional one kilogram of sugar, while those with four individuals or more will see a more substantial increase of 2 kilograms.

The government had also earlier issued a 10-day ultimatum to merchants to adjust sugar prices failure to which the government warned of forced pricing measures.

While addressing people at the third Nebu Gold Expo in Cairo, Egypt’s minister of supply and internal trade, Ali Moselhi, called on merchants to heed to the 10-day period to review their prices before the government resorts to advanced regulatory measures.

https://www.foodbusinessafrica.com/egyp ... ice-surge/

[nobody]

America’s Sugar Shortfall Leaves Candy-Makers Scrounging

(Bloomberg) -- Bonbons and candy canes may dominate the American holiday aesthetic, but US confectionery companies are feeling anything but jolly as they head into one of the sugar market’s tightest years in recent memory.

Prolonged droughts in major cane-producers Mexico and Louisiana have helped push US sugar futures to the highest ever for this time of year and forced users to turn to high-cost imports instead. Sweets-makers paying up to snag supplies are choosing to protect their margins by raising prices for consumers — and hoping shoppers don’t balk at the mark-up.

“We just found that it was better to just pay more for sugar and pass it along to the consumer than to be completely out of sugar,” said Kirk Vashaw, chief executive officer of Dum Dums lollipop maker Spangler Candy Co. “And there’s a lot of other companies that I think thought the same thing.”

Candy is big business in the US: Confectionery retail sales are forecast to be $48.8 billion this year, according to consumer research group Euromonitor International. With about 1,600 manufacturing sites across all 50 states, the US sector employs more than 200,000 people, the National Confectioners Association estimates — with more than double the number of indirect roles, like suppliers.

Rising food costs have been a problem ever since pandemic-era supply chain snags and labor shortages blindsided businesses in 2020. Even now, food prices for many everyday items remain at their highest levels ever — and sweets have been particularly hard hit. Consumer prices for confectionery items rose 13.4% in the 12-month period ending Nov. 25, according to data from consumer researcher NIQ, outpacing overall grocery gains.

Although inflation is a problem the world over, the US sugar market has been uniquely impacted due to its protectionist regulations. US rules cap both domestic sales and the volume of foreign supplies that can be brought in under low duties; all other sugar imports past those so-called tariff-rate quotas are subject to higher taxes. The regulations are intended to protect grower profits, especially given higher US production costs, and prevent other countries from flooding the US with sugar.

“Congress has to continually balance seeking trade opportunities outside of the US while protecting US producers from unfair practices used by other countries to prop up their own industries,” Rob Johansson, director of economics and policy analysis for the American Sugar Alliance, said in an email.

But critics say the rules aren’t nimble enough to keep pace with any domestic production shortfall. An October report from the US Government Accountability Office found the program cost sugar users like consumers and food manufacturers more than it benefited producers, resulting in a net economic loss of as much as $1.6 billion a year. Johansson, whose group represents a coalition of sugarcane and sugar beet producers, said the GAO report “used biased and dated information.”

In normal years, imports from Mexico, which get preferential treatment, and those allowed under quota limits from other countries are generally enough to fulfill US demand. But Mexican imports haven’t held up: In November, the US imported the least sugar from Mexico for that month since at least fiscal 2011, USDA data show.

In fact, shortfalls have become so acute this season that buyers are increasingly turning to so-called high-tier tariff imports, or the ones taxed more for surpassing the quota limits. The US Department of Agriculture forecasts that those priciest imports are approaching the record highs seen after hurricanes Katrina and Rita in 2005 destroyed much of Louisiana’s cane crop and took refineries offline.

The US is currently at “a high moment of anxiety when it comes to our sugar supply,” said Grant Colvin, the executive director of the Alliance for Fair Sugar Policy, a coalition of sugar users who advocate for regulation reforms. “The program is designed to inflate the cost of sugar.”

The reauthorization of the Farm Bill in 2024 will give advocates a chance to lobby for a change in the way future import quotas are determined. But past efforts to overhaul the process have failed, and companies struggling to afford sugar aren’t just waiting for Washington.

Instead, candy-makers are taking matters into their own hands. In addition to raising prices, some companies are trying to lock in supply costs ahead of schedule. That’s what Bryan, Ohio-based Spangler Candy did: It booked its 2024 sugar contracts this past February, months earlier than usual. CEO Vashaw said the company is likely to do the same again for 2025, since concerns over shortages have kept prices elevated.

If the sugar problems continue much longer, more companies might look to offshore output. It has happened before. In 2019, Spangler moved production for Sweethearts, the popular heart-shaped Valentine’s Day candy, and Necco candy wafers from Boston to Mexico after the brands’ former owner went out of business. Half of Spangler’s candy cane production was already south of the border at the time. Better automation in the US offsets the higher prices of sugar, so production costs for candy canes are similar in both countries, Vashaw said.

Atkinson Candy Co., the 91-year-old company behind Mary Jane peanut-butter caramels, already moved production of its “Mint Twist” Christmas candies to Guatemala in 2010. Third-generation candy-maker Eric Atkinson said he has considered moving more hard candy output away from Texas if conditions don’t improve, though he hasn’t made any concrete plans.

“One of the things that people read into that is that we are exporting jobs. And the fact of the matter is those jobs weren’t going to be there anyhow based on the price that we have to charge,” he said. “We’re maintaining a brand in the only way that we could.”

Despite the challenges, larger candy companies have continued to see revenue growth amid strong consumer demand, offsetting sugar costs, said Renata Medeiros, director of food and agriculture client coverage at ING. But for smaller companies with less negotiating power, the impact of expensive raw materials takes a toll. US raw sugar futures eased off the contract’s record highs posted in November but are still close to double levels from a decade ago. Prices for physical refined sugar, especially purchased via the spot market, tend to be much higher than futures.

When manufacturers pass on the higher raw material costs to consumers, there’s always a chance retail sales drop. So far, unit sales in the confectionery category only dipped 0.5% over the past year, the NIQ data show, suggesting buyers are still willing to shell out for small luxuries like desserts, even at higher prices. But current levels are “close to the point where significant price increases probably aren’t going to work” and could have “serious consequences” on unit sales, said Paul Steed, a former commodity price risk manager at Mars Inc.

The sugar issues are also hitting other users, from pastry shops to cafes. Some commercial bakers are looking to secure multiple suppliers in order to reduce supply-chain risks, the American Bakers Association said in an email.

Over the course of last year, Brooklyn institution Junior’s raised its prices 12% to partially offset costs, but it hasn’t been enough, with margins slashed in half since the pandemic, said owner Alan Rosen. There are no alternatives to sugar, since that would compromise the quality of its 73-year-old cheesecake recipe.

“Our costs have approximately doubled over the last years. We can’t double our prices to our consumers. It’s just virtually impossible,” Rosen said. “Our cheesecakes are truly great, but I don’t know if they’re twice as great.”

https://finance.yahoo.com/news/america- ... 05505.html

[nobody]

Suikerprijs neemt duik

Na de recente prijsstijgingen is suiker de voorbije weken fors goedkoper geworden. Een grote aanvoer van suiker uit Brazilië doet de prijzen dalen.

Ruwe suiker noteert nu aan 21,4 cent per pond in New York. Op de Londense termijnmarkt wordt voor een ton witte suiker 614 dollar betaald.

Dat zijn de laagste prijzen sinds maart. Suiker koerste in november naar het hoogste prijspeil in twaalf jaar, maar de voorbije weken is die prijsopstoot weggeveegd. Sinds november daalde de suikerprijs met 23 procent.

Reden is de enorme suikeroogst in Brazilië, de grootste uitvoerder van suiker wereldwijd. De verwachting is dat de aanvoer vanuit Brazilië de komende maanden nog zal stijgen.

https://www.msn.com/nl-be/financien/nie ... e02f&ei=31

[nobody]

Uganda Sugar Manufacturers Association calls for amendment of Sugar Act amidst license controversy

UGANDA – The Uganda Sugar Manufacturers Association (USMA) has urged for the amendment of the Sugar Act of 2020, proposing a suspension of all currently issued sugar licenses by the Ministry of Tourism, Trade, and Industry.

The association, led by Chairperson Jim Kabeho, alleges that some licenses were illegally issued, claiming non-compliance with both the 2010 Sugar Policy and the 2020 Sugar Act.

USMA is advocating for the establishment of the Uganda Stakeholder Sugar Council to oversee and make recommendations before the issuance of licenses.

Jim Kabeho stated, “We agree that the minister would continue to issue licenses but with recommendations from the council; once the Council is in place, it can put into place some regulations.”

Kabeho and other sugar millers, including Kakira Sugar Ltd, Kinyara Sugar Works, and Sugar Corporation of Uganda (SCOUL), presented their case before the Committee on Tourism, Trade, and Industry on Monday regarding the Sugar (Amendment) Bill, 2023.

The association opposes the current law’s requirement for sugar millers to share proceeds from sugarcane by-products with farmers at a rate of 50 percent, deeming it impractical and a hindrance to investment.

Kabeho argued, “If we are to keep the sugar industry in Uganda competitive, the 50 percent is already higher than the worldwide industry standard.”

The USMA highlighted the challenges in Uganda’s sugar market, citing low competitiveness in the region due to lower sugar prices in Kenya and Tanzania.

The committee acknowledged the disparity in sugar cane prices paid to farmers in Kenya and Tanzania compared to Uganda. The sugar millers argued that sharing by-products at a rate of 50 percent complicates the market further, urging the removal of such provisions from the Bill.

Rajbir Rai, Director of Kinyara Sugar Works, expressed concern about the declining production in the sugar industry, leading to rising prices. He emphasized the need to reconsider the percentage shared from by-products without any increments.

USMA also raised concerns about the sugar levy imposed on millers, proposing that farmers should also contribute to finance the Sugar Council’s activities.

Additionally, the group reintroduced the idea of zoning millers, suggesting a minimum distance of 25 kilometers between individual millers. Committee members raised questions about the practicality of applying the 50 percent profit share from by-products and emphasized the need for fair considerations.

https://www.foodbusinessafrica.com/ugan ... ntroversy/