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How Smuggling Has Cut Down Sugar prices

How Smuggling Has Cut Down Sugar prices

The minister of Trade, Industry and Cooperatives Amelia Kyambadde has revealed how rampant smuggling has resulted to a drastic drop in sugar prices.

Early last year, sugar prices hit a maximum of UGX 8,500 per kilo in some parts of the Country partly due to prolonged drought that stretched for a period of 9 months from early 2016 and increased regional demand of Uganda’s Sugar especially in Kenya and Rwanda.

However, while presenting a ministerial statement at parliament on Tuesday, Kyambadde says that  in October to December 2017, sugar prices changed and dropped to UGX 190,000 per 50kg bag (3800/= per kilo) and currently it is at UGX 138,000 per 50 kg bag (2760/= per kilo) as of 12th February 2018.

Whereas this drop in sugar prices could be good news to consumers, Kyambadde has blamed this drastic drop in sugar to smuggling of duty free sugar from Kenya and has consequently vowed to clamp down on the smugglers.  Kyambadde said this while presenting a ministerial statement at parliament on Tuesday to respond to concerns that her ministry had allowed importation of one million tons of free sugar from Kenya.

“Smuggling of duty free sugar has not only hurt the sugar industry but also the out growers of sugarcane whose livelihoods entirely depend on supply of sugarcane to the factories, affected electricity generation, and shall eventually affect other industries that depend on by-products of sugar cane such as distillers of spirits, other beverages, bakeries and animal feed industries,” Kyambadde said in her statement.

She confirmed that smuggling of sugar is mainly done by boda bodas through their porous borders and then re-bagged in branded bags of Kakira, Kinyara and Lugazi sugar making it difficult for URA to seize.

Early last year, sugar prices hit a maximum of Shs8,500 per kilo in some parts of the Country. This according to Kyambadde was due to prolonged drought that stretched for a period of 9 months from early 2016, increased regional demand of Uganda’s Sugar especially in Kenya and Rwanda and increased cost of sugar cane from Shs85,000 in 2016 to Shs175,000 in 2017.

Records show that from July to December 2017, URA operations seized over 55MT of illicit sugar.  As a result of this cheap sugar in the country, Kyambadde says that sugar millers have stock piled over 50,000 Metric tons of sugar with Kakira Sugar having 13,712MTs, Kinyara Sugar-22,099MTs, SCOUL-Lugazi -8,052, Mayuge Sugar-5,000, GM Sugar-2,000, Kaliro Sugar-1,750.

“Madam Speaker and Honorable Members, to minimize the volatility in the sugar sub-sector, the Ministry is working with this honourable house to improve the Sugar Bill with the view to fast tracking its enactment. When this Bill is enacted and implemented, most of the concerns of the public will be addressed and this will further improve stability in the sugar sector,” she said.

Kyambadde, also Mawokota North County MP said that starting this week, government is undertaking operations to curtail smuggling of sugar across our borders.

The sugar industry is one of the fastest growing industries in Uganda contributing over UGX 290 billion in taxes in 2016/17 and employing over 60,000 Ugandans directly and indirectly. The Industry produces over 100 MW of electricity from bagasse of which over 40MW is supplied to the national grid. However the taxes and the power generated have reduced of recent.

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