Ugandan neighbours are shunning its sugar because of the high cost associated with it compared to other producing countries as far as Egypt and Swaziland.
Reports also indicate that Kenyans import Ugandan sugar at KE Shs 64,420 or (U$600) compared to Egypt (Shs61,842), Mauritius (Shs59,342) and Zimbabwe Shs59,279. According to exchange rates KE shs1= U$0.0094.
Sudan and Kenya absorb 50 percent of Egypt’s sugar exports and are expected to remain the main export destinations in MY 2020/21.
According to Kenya’s Sugar Directorate, “Mill white/brown sugar from Swaziland was the cheapest with an average price of KESh54,209 per tonne. Sugar from East Africa Community, precisely from Uganda was landing at an average price of KESh64,420 per tonne.”
Meanwhile, Cost, Insurance and Freight (CIF) of the landed commodity in Mombasa for the imported table sugar averaged Sh60,117 per tonne in the review period.
Most Kenyan traders opted to import sugar from as far as Egypt and not Uganda because of the extra cost.
Out of a total 207,000 tonnes imported by Kenya between January and May, shipments from Uganda only amounted to 25,000 tonnes.
Since last year in November, Uganda sugar producers begun holding large stockpiles after exports to neighboring Tanzania, Rwanda and South Sudan were disrupted.
“Factories are holding too much stock because of limited exports,” said Jim Kabeho, chairman of the Uganda Sugar Manufacturers Association.
Uganda sugar exports to Rwanda were halted when the main entry point was closed in March 2019.
Last year alone, Uganda produced a total of 500,000 tons which meant there was a surplus of 150,000 tons that would ideally be exported.