Uganda sugar millers warn of deep collapse in sugarcane prices as growers protest

July 8, 2024 in Business, Companies, Land & Agriculture, Trade & Industry by Editor

Sugar millers in Uganda are warning of even lower prices for out-grower supplied cane in the coming months, on the back of declining regional demand for refined sugar and a bumper crop of cane following an increase in acreage.

Retail prices for sugar have plunged to their lowest levels since March 2019, with a kilogram of sugar now selling at an average of UGX 3300, about a half of the peak price of UGX 6500 at the end of 2022. Prices for cane have followed suit, plummeting from a peak of UGX250,000 a ton, to UGX 130,000 last week.

Angry out-growers in Buikwe and the Busoga sub-region, voted to halt supplies to millers.  They are asking for dialogue to negotiate a better deal. Current prices they say, are below the cost of growing cane to maturity.

Millers attribute the price reversal to propitious weather conditions over East Africa over the past two years, which resulted into a bumper crop across the region. High production in Kenya, the main export market for Ugandan sugar, has impacted demand from there. Other markets within the region remain inaccessible to Uganda millers.

“I also think that what we are seeing is the normal cyclical self-correction of the market, which is normal for agricultural products,” says Albert Bituura, the General Manager at Hoima-based Bwendero Sugar.

“What I can predict is that prices for cane are going to fall even further as the crop planted during the boom years comes to market,” Bituura warns further.

Prospects for better prices remain slim. Wilbur Mubiru, the spokesperson for the Uganda Sugarcane Technologists Association, says retail prices for sugar in Uganda and by extension raw cane, pivot around the industry’s access to regional markets. “So far, these markets have been fluid. We’re seeing a buildup of stocks,” he explained.