The price of sugar on the Ugandan market has recently decreased from UGX 5,500 to UGX 5,000 per unit, bringing relief to consumers but causing concern for sugarcane farmers. Major sugar factories in Uganda, including Kaliro, Lugazi, Mayuge, GM, Bugiri Sugar, and Kinyara, have responded to the drop in sugar prices by reducing the prices offered to sugarcane farmers.
On January 29, 2024, Kaliro Sugar informed outgrowers that, due to the continuous decline in sugar prices, they would be revising sugarcane prices to UGX 170,000, effective from January 30, 2024. The notice emphasized that future adjustments might occur based on market sugar prices.
This development has raised concerns among farmers in Busoga and Bunyoro. Isa Budhugo, the chairperson of Uganda Sugarcane Growers Association (USGA), expressed worry that the new sugarcane price falls below the break-even point for farmers, which is at UGX 210,000. Farmers who have taken loans for sugarcane cultivation fear potential financial difficulties if prices do not rise in the coming weeks.
Economist Moses Aturinda attributed the decline in sugar prices in Uganda to a global sugar surplus of approximately 0.5 million tonnes in January. He highlighted increased sugar production in Brazil, a significant player in the global sugar market, as a key factor leading to the current low international sugar prices.
Jim Kabeho, chairperson of the Uganda Sugar Manufacturers Association (USMA), added that illegal imports of sugar into Uganda have also contributed to the drop in sugarcane prices. The porous border points in eastern Uganda have become conduits for the smuggling of large quantities of sugar from neighboring countries.
The decrease in sugar prices raises concerns not only for the sugar industry but also for the livelihoods of sugarcane outgrowers. The smuggling of duty-free sugar affects both the industry and farmers, emphasizing the need for measures to address illegal imports.
