The government of Kenya has ordered for an immediate ban on the importation of brown sugar and cane. The ban has put the sugar industry in huge a crisis.
The directive was issued in a July 2 statement by Mr Peter G Munya, the Cabinet Secretary for Agriculture, Animal Industries and Fisheries. On the release of the directive, more than 150 trucks carrying raw cane became stuck at the Busia border.
Mr Munya also ordered the suspension of pre-shipping approvals and extension of all sugar import permits until further notice.
Mr Munya, in his press release, said that the government was moving in to revive the sugarcane industry. He further said the government aims to make the sector competitive. He also said the belief is that the sugarcane industry has huge potentials to regain its lost glory and flourish
How the sugarcane import ban affects Uganda
Mr Jim Kabeho, the chairperson of Uganda Sugar Manufactures’ Association described the move as a crisis for Ugandan sugarcane industry.
He said: “We are in trouble, we used to export sugar to Rwanda, but Rwanda is closed. We tried South Sudan, but Juba doesn’t respect some regional protocols. Now Kenya, which was a market for both cane and sugar is closed.
“I don’t know what we are going to do. We have about $50m in stock and I’m afraid we are going to close. We have written to almost everyone, but nothing has borne fruit,” Mr Kabeho said.
He added: “This is a crisis because we have never experienced this. We have never had stock in excess of $50m. What this also means is that sugar is going to get spoilt because some companies have no stores for keeping excess stock.”
However, Mr Isa Budhugo, the chairperson of Busoga Sugarcane Outgrowers Association, has called for retribution against Kenya for their move.
“Of course, Kenya has the right to ban the importation of our sugar. However, our government should also temporarily ban their goods so that they also feel the pain,” Mr Budhugo said.
He also wants the government to buy all excess sugar and store it in warehouses such that when there is a market, it can sell.
Why Kenya imposed Sugarcane ban
Kenya has suffered turbulent times in its sugar sector leading to the closure of several major sugar manufacturers. Mumias Sugar, the biggest sugarcane miller, where the government owns up to 20 per cent shares, is heavily indebted.
Other sugar manufacturers such as Nzoia, West Kenya, Olepito, West Sugar, Butali and Busia Sugar are under-performing due to limited supply of raw materials.
The underproduction in the sugar sector has been unable to match the increase in local market demand. Meanwhile, the increase in demand has more than doubled in the last decade.
In 2016, for example, sugar production in Kenya increased to 639,741 metric tonnes from 523,652 in 2010. While in 2019, the production slumped to 440,717 metric tonnes against the national consumption, which stood at 1,038,717 resulting in huge sugar deficits.
This means that Kenya had to rely heavily on imports from Brazil and COMESA bloc market, particularly Uganda.
According to the statistics from the Ministry of Agriculture, Animal Industry and Fisheries, between January and March, Kenya imported 157,529 metric tonnes of brown sugar from COMESA, while the agriculture and food authority had additional requests to import another 586,000 metric tonnes, which are yet to be approved.
But it had to resort to the importation of raw cane from Uganda, with the main destination being Busia Sugar Industries, a move aimed at cutting the sugar deficits in Kenya.
The solution to Uganda’s looming crisis?
The traders and farmers, through the national cross border trade chairperson, Mr Godfrey Oundo Ongwabe, have petitioned the Ministry of Trade and EAC over the issue.
The petition says the decision by the Kenyan government was hurriedly undertaken without any communication to the Ugandan government.
“The traders got an immediate stoppage which was aimed at stifling trade in sugarcanes across the border,” the letter reads.
Last year, President Uhuru Kenyatta and his Ugandan counterpart Museveni, signed a bilateral agreement. The agreement allowed Ugandan farmers to import sugarcanes to Kenya for three months. The said agreement expired last December.
Ugandan Traders speak out
Mr Godfrey Barasa, a Ugandan trader, said close to 6,000 tonnes of sugarcanes were rotting away. Like others, his trucks was not allowed to cross into Kenya last week.
“I have six trucks waiting to cross into Kenya. They are now wasting away because of their high rate of perishability,” Mr Barasa said.
Mr Barasa wondered why Kenya had targeted sugarcanes and yet continued to import cereals, tomatoes and fruits from Uganda.
Ms Angela Odongo, another sugarcane trader at the border, is also affected by the sugarcane import ban. “I got permits, paid farmers and transporters, but without any communication. I am being told that there is a ban on sugarcane importation into Kenya. She said that the ban was ‘in bad spirit’ and in violation of the East African Community protocol.
Under the common market protocol, East African Community allows free movement of people, goods, services, labour and capital.