Why Kenya made U-turn on Uganda sugar imports

finance & economy - January 16, 2021

Kenya will this year import 90,000 tonnes of sugar from Uganda and the remaining 160,000 tonnes from other countries after exhausting its Comesa import quota for 2020.

This is after Uganda through the Uganda Manufacturers Association (UMA) clarified to Kenya that it has enough sugar both for domestic and export markets and denied importing sugar from outside the Common Market for Eastern and Southern Africa (Comesa) region.

Kenya has been importing 350,000 tonnes from within the EAC and Comesa due to an increasingly widened deficit in the local market.

Rules of origin

Comesa Council of Ministers granted Kenya a two-year extension of the sugar safeguard beginning March 2021 to February 2023. The country produces about 600,000 tonnes a year, but it is not enough for local consumption.

“We are considering importing 90,000 tonnes of Sugar from Uganda,” said Betty Maina, Cabinet Secretary for Industry, Trade and Enterprise Development.

“We are considering importing sugar from Uganda under Comesa and the EAC because we are beginning a new year. The import being negotiated will not be affected by the exhaustion of allocated quota under Comesa safeguard for 2020,” Rosemary Owino, head of the Sugar Directorate, Agriculture and Food Authority, in Kenya’s Ministry of Trade.

Last year, Kenya’s trade officials declined to allow a section of Ugandan products into the country over concerns that the goods did not meet the Rules of Origin and tariff obligations.

Tanzania, which had previously completely banned exports from Uganda, has allowed in about 20,000 tonnes.

“Uganda has a lot more than the 90,000 tonnes of sugar earmarked for export to Kenya. I think we have had a number of missions from Kenya to verify the ability of Uganda to supply enough sugar to the market,” said Daniel Birungi, CEO of the UMA.

Explaining the surplus

  • Uganda has 11 sugar mills producing 510,000 tonnes and the consumption is 360,000 tonnes per annum. The surplus is sufficient for export.
  • Uganda’s biggest sugar producer remains Kakira Sugar Works with an annual production of 180,000 tonnes while Kinyara Sugar Works produces 120,000 tonnes.
  • Sugar Corporation of Uganda Limited produces about 100,000 tonnes.
  • The surplus, which has now grown to 160,000 tonnes, is exported within East Africa, Comesa and DR Congo.
  • Two years ago, Kenya’s Agriculture Cabinet Secretary Peter Munya announced a ban on all sugar imports and subsequently revoked all sugar import permits, some of which were held by Uganda manufacturers and exporters.

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