Rwanda's imports from Uganda have stabilised sugar prices in Kigali, from $1.47 per kilo in June to $0.88-$0.95 in October.
Rwanda has overtaken Kenya as Uganda’s biggest sugar export market in the East African Community.
In 2022, Uganda exported at least 1.7 MT, but the sugar full year ended December 31, 2023, and the latest sugar export data from Uganda Revenue Authority (URA), show Rwanda ordered over 35.3 per cent or 39.3 MT out of the 111.1 MT Uganda sugar millers exported to the EAC Common Market in the nine months this year.
“We have not been exporting to Kenya since July this year,” Jim Kabeho, chairman of Uganda Sugar Manufactures Association, recently told The East African.
Rwanda depends on imported sugar to plug sugar deficits and domestic prices.
Rwanda’s import orders from Uganda have helped stabilise the prices of sugar in Kigali and hit an all-time high of $1.47 per kilo in June to anywhere between $0.88— $0.95 per kilo in the first week of October 3, 2024.
The country also faces challenges of shortage of land for cultivating and few investments due to low returns. Cane farmers in Rwanda prefer growing crops such as maize, rice, and vegetables in marshland.
Kenya’s sugar imports from Uganda have sharply dropped in the nine months to September 30, 2024, dashing millers’ hopes of fully tapping into EAC’s biggest economy.
Kenya imported only 18MT, 16. 2 per cent of sugar from Uganda. Tanzania is the second largest consumer of Uganda’s sugar, closely followed by South Sudan, while Kenyan comes third, highlighting EAC manufacturers are yarning for predictable export.
While Uganda can supply between 120,000 and 150,000 tonnes of sugar to Kenya annually, frequent policy reversals have hampered market access through restrictive permit issuance, and outright banning of the exports.
Uganda’s Industry Minister David Bahati told The East African that he will continue engaging his Kenyan counterpart to allow seamless flow of sugar, but suggested a long-term solution, Uganda is encouraging value addition on brown sugar.
The shift from selling brown sugar as a raw material to making industrially refined sugar for the beverages (soda) industry and making ethanol for mixing in petroleum and to generate green energy is what Uganda is looking at to end the trade wars between Kenya and Uganda.
“We are coming up with a regulation to allow power generated by sugar millers to be connected to the national grid,” Bahati told The East Africa.
Uganda’s biofuels sector is at its initial stage, but companies like Kakira Sugar Works Limited (KSWL) in Jinja and the Sugar Corporation of Uganda Limited (SCOUL) in Lugazi already have installed capacity to produce 35,000 l and 60,000 l of molasses ethanol per day, respectively.
SCOUL produces maize ethanol as well. Kakira Sugar Limited, a local sugar producer, has started commercial production of ethanol.
The Uganda sugar millers started exporting to Kenya in the last week of September after authorities rescinded an earlier decision to lock out their sugar.
In the second week of September, Andrew Karanja, the cabinet secretary for the Ministry of Agriculture and Livestock Development clarified sugar from the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC) is not banned.
But any sugar outside the two blocs is banned, a measure the minister said was to protect the domestic market against competition, as projections indicate 16 factories could produce 800,000 metric tonnes this year.
This means with the average annual sugar consumption in Kenya estimated at 950,000 metric tonnes, Ugandan millers always expect to cover the shortfall, but most times have been disappointed by Kenya authorities.