Sugar export revenue drops 58% in July – BoU

Uganda’s sugar export earnings in the month of July suffered a 58.3% drop from an earlier three-month recovery, according to a latest report from the Bank of Uganda (BoU).
According to the BoU report, the country exported sugar worth $12 million (Shs. 46.2 billion), compared to $19 million (Shs. 73 billion) earned in June.

Similarly, the decline in value has been attributed to the scarcity of cane which has forced manufacturers to reduce the volumes they export and further strain local demand.

In July, according to the Bank of Uganda, the volume of sugar exports fell by 68.7%, falling to 16,604 tonnes, compared to 26,687, 26,697 and 27,391 tonnes recorded in April, May and June respectively.

Industrial players attribute the drop in export earnings to the drop in volumes shipped.
In an interview with the Daily Monitor, Mr. Wilberforce Mubiru, the Secretary General of the Uganda Sugar Manufactures Association (USMA) said: “There is a shortage of cane in the Busoga region which is the main producing region. 30 percent of farmers have abandoned sugarcane production citing low prices.

Mr. Mubiru added that due to the scarcity of cane, processors have been forced to operate below capacity, thus reducing exports to focus on production for the local market.

“Processors cannot continue to export and ignore local market demand,” Mubiru said.
Due to the scarcity, cane prices rose to Shs 165,000 per tonne from Shs 90,000 at the start of the year.

Despite rising cane prices, there are no raw materials to run the mills at full capacity. Ideally, it takes 18 months to grow and harvest mature cane suitable for sugar production.

“It will take some time for the canes to mature for farmers who have resumed production. This means the shortage will still be with us for a few more months,” Mubiru said.

Export trends
According to Uganda Sugar Manufacturers Association officials, exports have increased, noting that they now export to Burundi, DR Congo, South Sudan and Kenya, but with some restrictions.

Sugar exports had fallen in December to just 8,833 metric tons, signaling the damage caused by blockades against Ugandan sugar in countries such as Kenya and Tanzania.

Edward N. Arrington