Sugarcane Prices Drop in Uganda

By Carol Kirabo

Sugarcane prices are falling after a sharp fall in the prices of sugar in East African Community and Sugarcane farmers under the umbrella of the Busoga Sugarcane Growers Cooperative Union are demanding stable sugarcane prices as a way of averting a possible crisis within the industry.

The farmers in Busoga sub region, while addressing journalists on Tuesday, observed that price stability will improve the viability of the sugar industry within hosting communities and safeguard farmers from manipulation by middlemen and sudden price falls.

Currently, the price of a metric ton of sugarcane has sharply fallen from between UGX 210,000 and 240,000 to UGX 150,000 and UGX 170,000

and it should be noted that the price of processed sugar fell from UGX 250,000 to UGX 190,000 at wholesale, forcing most sugar manufacturers to reduce the price of sugarcane in Uganda.

The Interim National Chairperson of sugarcane farmers, Issa Budhugo, cited a possible return to the sugar crisis seen between 2018 and mid-2022, where sugarcane prices fell from 123,000 to 25,000 shillings per tonne.

He also said that the crisis derailed farmers and forced most of them to clear their farms and opt for other crops, which has resulted in the prevailing sugarcane scarcity.

Caption: Reduced prices of sugarcane from various millers in Busoga sub region

Budhugo noted that without assurance on sugarcane prices, the industry will be continuously controlled by syndicated rackets of processed sugar smugglers in East Africa and beyond, middlemen, poachers, and millers without sugarcane plantations, as well as registered-out grower farmers, whom he accuses of manipulating the rules of demand and supply to deliberately push native farmers out of the industry.

Budhugo argues that much as the Sugar Act abolished zoning and offered them a free market economy, to easily sell off cane to their preferred buyers, non-compliant millers, processed sugar smugglers independently decide on the final tonnage prices without factoring in the costs of production.

Some sugarcane farmers from Kamuli district say that the farmers are currently not enjoying a sense of relief, with prices ranging from UGX 150,000 to UGX 170,000 per tonne, which will deter smallholder farmers from embracing the industry.

These farmers add that, without clear price definitions, the prices will negatively derail them in the course of the anticipated bumper harvests during the forthcoming seasons.

These farmers argue that the reduction in the prices creates financial challenges for them, particularly considering the substantial costs incurred during the planting season.

Samuel Akalyamawa, a sugarcane farmer from Buyengo Town Council, says that multiple established millers no longer offer subsidies in terms of agricultural inputs, mechanization, extension services and transport trucks to the farmers, which further reduces the profit margin for the farmers.

“It is only done in the Bunyoro region by Kinyara Sugar Limited, which pays a higher price of UGX 160,000 per ton of sugarcane in addition to subsidized farm inputs, inputs, mechanization, extension services and transport trucks to the farmers. Kinyara Sugar Limited currently offers the best price to sugarcane out growers in Uganda,” Say Samuel  Akalyamawa.

It should be remembered that during the end of last week, sugarcane farmers in Masindi District under their Umbrella Masindi Sugarcane Out-Growers Association (MASGAL) led by Chairman Robert Atugonza, unknowingly threatened to suspend the supply of sugarcane to Kinyara Sugar Company Limited until further notice.

The farmers’ decision came in response to Kinyara Sugar Company’s recent unilateral decision to decrease the price for each tonne of supplied sugarcane from UGX 181,000 to UGX 160,000 with effect from January 25, 2024.