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JINJA - The continued issuance of licences to mushrooming sugar factories in Busoga and Buganda regions has led to low production of sugar Kakira Sugar Ltd joint managing director Mayur Madhvani has said.

Madhvani says the move by the trade ministry and the Uganda Investment Authority to issue the licences has led to the insufficient cane supply, which in turn leads to low production.

Madhvani made the remarks during the trade minister Francis Mwebesa's visit to the Kakira Sugar Ltd factory in Jinja district. Madhvani led Mwebesa in touring the factory.  

“We are pleased to host the minister and his visit comes at a time when the sugar industry is at low production due to insufficient cane supply which has resulted in high cane and sugar prices as well as no sugar exports,” Madhvani said.

Madhvani said the minister’s visit, therefore, will among other things shed light on the effects they had due to the continued non-operationalisation of the Regulations and Policy guidelines in the sugar industry.

“While we had a Sugar Policy passed in 2010 that was never implemented, The Sugar Act 2020 was passed by Parliament without the inclusion of zoning. It is imperative to note that zoning is strictly for millers, not farmers. 

The Sugar Act 2020 was passed ten years after the Sugar Policy was approved by the Cabinet, unfortunately, neither the Sugar Policy nor the Sugar Act has been operationalized and implemented and this has led to the current problems in the sugar industry,” Madhvani said.

He added that it should be understood by the trade ministry and those licensing new sugar factories that “It is not the number of factories that produce more sugar, but the strategic location of these factories with supported farmers and nucleus estates.”

According to him, there are nine factories and 11 licenses have already been issued to factories in Busoga. 

 Madhvani said Uganda was supposed to export 150,000 tonnes of sugar to the neighbouring countries this year, which, according to him, should have earned the country approximately $150 million.

Price of sugar

Madhvani told Mwebesa that the current high prices of sugar are a result of a shortage of sugarcane, which has resulted in the scramble for the only available immature sugarcane. 

He added that due to high cane prices, a further increase in the price of sugar has pushed a kilogram to shillings 6,500 which is not affordable by most consumers.

Sugarcane poaching

Madhvani revealed that the act of sugarcane poaching not only causes substantial financial loss, but also disrupts the delicate balance of the sugarcane supply chain, affecting the livelihoods of numerous stakeholders, including farmers, employees and the wider community.

“Such illegal activities erode the confidence of investors in the sector, hindering its growth potential and the overall economic development of the country," he said.

Continued influx of weighbridges

Cane purchace centres 

According to Jim Kabeho, a director in the Madhvani Group, there is a continued influx of new weighbridges [sugarcane purchase zones which locals call weighbridges because they have weighing scales.

Factories are not waiting for farmers to take cane to them. They set up a purchase centre in the community. They weigh and pay for the cane at that point, which previously was done at the factory. 

So, those who wait for the cane at the factory like Kakira, wait in vain because someone else bought it at a certain trading centre].

18 weighbridges have been constructed and are operational in Busoga alone and others are under construction.

All these have been set up within very short distances adding that this is confusing farmers by encouraging them to harvest and sell immature cane.

Kabeho called for the creation of an advisory sugar committee of all stakeholders with powers to implement decisions rapidly regulate the issuing of new licences and suspend those not implemented, guide registration of farmers with millers, limit the expansion of factories in close proximity of existing factories, stop the erection of cane weighbridges as they encourage supply of premature cane and ensure that all future licences are vetted by the Advisory Sugar Committee.

In response, Mwebesa said the Government is aware about all concerns and challenges affecting the sugar industry and that they decided to create an advisory council composed of farmers, millers and the Government adding that the process has started.

He said that the Cabinet secretariat has already received the draft of the amended Sugar Act, the Public Service Commission has already cleared the human resource needs for the council and they await a certificate of financial implications from the finance ministry.

“After this process, Cabinet will discuss and approve this draft and then will be sent to Parliament for debate and enactment. The sugar council will be constituted and it will have the powers to regulate the sugar sector,” Mwebesa said.