What you need to know:
- Sugar millers in Busoga Sub-region are currently buying raw cane from farmers at prices between Shs175,000 and Shs215,000 per tonne, marking a recent drop in prices over the past seven years.
Sugar millers in Busoga Sub-region are currently purchasing raw cane from farmers at prices ranging between Shs175,000 and Shs215,000 per tonne, marking the most recent decline in prices witnessed over the past seven years.
Farmers have been grappling with millers’ offers since 2017, starting at Shs175,000 per tonne, which further plummeted to Shs96,000 in 2021. Subsequently, the price surged to Shs240,000 in 2023, only to drop again by Shs65,000.
Godfrey Naitema, a farmer, expressed discontent, deeming the Shs65,000 reduction as “unfair” and “unacceptable,” particularly when farmers are servicing loans. Naitema emphasized the high costs of sugarcane cultivation, including purchasing seedlings and renting land, with minimal profits.
David Christopher Mombwe, the General Secretary of Busoga Sugarcane Outgrowers Association, characterized the decline in sugarcane prices as an exploitation of farmers. He urged the government to establish a minimum price of Shs250,000 per tonne to stabilize the market, arguing that even at this rate, millers could still make profits.
Mombwe highlighted that raw cane, primarily used for sugar production, is also utilized by millers for manufacturing other products like biogas, molasses, and fertilizers.
Isa Budhugo, the Chairperson of Uganda Sugarcane Growers Association (USGA), contended that lowering sugarcane prices due to a drop in sugar prices is impractical. He pointed out that the breakeven point for sugarcane farmers is Shs210,000, and receiving less than that could lead to property confiscation by banks. Budhugo warned of a 30-day suspension of sugarcane supply to millers unless prices stabilize.
Jim Kabeho, the Chairperson of Uganda Sugar Manufacturers Association, attributed the reduction in sugarcane prices to the decrease in sugar prices. He mentioned the influx of cheap sugar from Kenya through porous border points in eastern Uganda as a contributing factor. Kabeho also noted the current annual refurbishment of machines in some factories, leading to a temporary halt in production and, consequently, lower demand for sugarcane.
In a related development, cane farmers in Masindi District, under the Masindi Sugarcane Out-Growers Association (MASGAL), decided to suspend the supply of sugarcane to Kinyara Sugar Company Limited. This decision was prompted by Kinyara Sugar Company’s unilateral reduction of the price per tonne from Shs181,000 to Shs160,000, effective from January 25.
