Government has no intentions of importing duty free sugar in a bid to reduce on its prices.
According to the Ministry of Trade Amelia Kyambadde, the Country has a sugar production of 392,000 metric tonnes which is enough. Media reports on Tuesday said that a kilogramme of sugar is set to drop from about Shs5,000 currently to as low as Shs3,600 after Cabinet resolved to scrap tax on imported sugar.
She said in a statement: “As the sector Minister, I wish to categorically state that the story is inaccurate and I would wish to issue a disclaimer as government has not taken a decision to reduce taxes on imported sugar.”
“Sugar prices have steadily reduced from average UGX 8,500 in May 2017, to currently UGX 4,500 with expectations to reduce even further.”
Data from Uganda Sugar Manufacturers Association shows that 438,000 tonnes were produced in 2014 and only 392,115 tonnes in 2016. This year, production is expected to slump further to 329,500 tonnes.
“Government has not taken any decision on importation of duty free sugar into the country and sugar millers have sufficient stock of sugar to meet domestic demand currently.”
“In this regard therefore, Government cannot import duty free sugar since we have enough stocks and prices are stabilizing steadily. My Ministry will continue to monitor the sugar situation to ensure adequate supply and affordable prices for the citizenry.”
Neighbours Kenya recently declared zero tax on sugar imports which brought the prices considerably down but Minister Kyambadded quashed reports that President Museveni also tasked Finance minister Matia Kasaija to provide Shs68b to Kenyan investor Amina Moghe Hersi’s Sugar Factory Limited (ASFL) to boost sugar production in the country and create jobs in Acholi.
The URA commissioner for customs, Mr Dickson Collins Kateshumbwa, saidon Monday that sugar smuggling has so escalated that within only five months, the tax agency has made 265 seizures. This translates into 53 per month or at least two cases daily.
“It is a battle we are fighting day and night. We are impounding smuggled sugar. We have deployed intelligence officers but the problem has not stopped. URA cannot build a wall at the borders to stop smuggling. We had meetings with the government and the leaders in the sugar industry. We have told them that they need to do something about sugar prices,” Mr Kateshumbwa said.
Mr Jim Mwine Kabeho, the chairman of Uganda Sugar Manufacturers Association (USMA), in a letter to the Minister of Trade, Ms Amelia Kyambadde, indicated that current sugar production is about half of the installed capacity.
The country’s aggregate sugar production shrank by more than 85,000 tonnes in 2015 and over 110,000 tonnes in 2016, dropping further to 170,000 tonnes this year.
If the local sugar manufacturers were producing at full capacity, Uganda would churn out at least 600,000 tonnes annually.
This, Mr Kabeho said, would provide enough sugar on the market at affordable prices and have excess for export.
“Sustainable sugar and sugarcane production require a stable environment and long term planning due to the long gestation period for sugarcane as a plantation crop,” Mr Kabeho wrote to Ms Kyambadde on October 30.
