Sugar producers have complained about mountains of unsold sugar that has built up in the past three months after the government gave a temporary green light to imports of duty-free sugar designed to plug a supply deficit.
Wilberforce Mubiru of the Uganda Sugarcane Technologists Association (USCTA) said 12.5 percent of last year’s estimated total output remained unsold.
The east African country’s three main producers have accumulated 37,500 tonnes, he said, threatening their finances and jeopardising investment plans.
“Since the government allowed importation of duty-free sugar the market quickly got saturated and as a result we’ve piled up stock over the last three months,” Mubiru said.
In August, Uganda was allowed by the East African Community (EAC) bloc to import duty-free sugar for six months to plug a 40,000-tonne supply gap of the sweetener.
Producers, however, said the deficit was exaggerated and the import of duty-free sugar had warped the market.
“We have these accumulated stocks because of the excessive importation of duty-free sugar ... the supply gap wasn’t that big (40,000 tonnes),” said Ramadasan Vekatraman, general manager at Kinyara Sugar Works, one of the three big producers.
The five-member EAC, whose other members are Kenya, Tanzania, Rwanda and Burundi, has a customs union and usually imposes a 100 percent tariff on all sugar imported into the bloc.
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written by Coach Outlet Online, April 04, 2012
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