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{UAH} Museveni Gives New Directives on Sugar as Retailers refuse to abide by the 5,000 Shs per Kg

President Museveni has issued a directive to enforce the zoning of sale of sugarcane to milling plants under the 25km radius around any sugar milling plant.

President Museveni has issued a directive to enforce the zoning of sale of sugarcane to milling plants under the 25km radius around any sugar milling plant.

The implementers are Resident District Commissioners and Chief Administrative Officers with the president arguing that free rein of operators is what is causing sugar price hikes.

However, for some out-growers of sugarcane, the zoning is not tenable and they maintain they should be able to sell to whichever mill they choose.

Retailers in downtown Kampala and the surrounding suburbs have declined to sell sugar at the government recommended price of UGX5000 (about $1.40) saying that the supply situation is yet to stabilize and wholesalers have made no reductions which has left them with expensive stock.

Apart from this uncertainty, Amos Murangira, a trader in Kikuubo, Kampala's wholesale centre says that  overhead costs in Uganda have doubled.

"The government has no right to determine how much we sell goods, because the prices are determined by market conditions. Rent has increased, electricity prices have gone up, food prices have almost doubled from a few years back. We also sell according to what is happening in the market." Murangira said

Currently, a kilo ranges from UGX5400 to UGX5800 for sugar measured out from the sack while the packaged version goes for between UGX6000 and UGX7000, depending on where the trader sourced supplies. Middlemen have also been blamed for the situation by continuing to hoard although the major manufacturers have reported no drastic increase in the factory price.

A month ago and before Kenya reported widespread shortages, the average price for sugar in Uganda was UGX4500. Although the current price is considerably lower than the UGX 8000 some shopkeepers were demanding a few weeks ago and what prompted government intervention, consumers are beginning to think sugar is becoming a luxury item.

Alex Mbaine said prices might go down in the coming days, after traders sell off stock they bought expensively at the end of April. "We had stocked a lot of sugar, because we feared the prices were going to go even higher. Some of us are making losses even at the UGX5500 per kilo. The economy is doing badly and we ask the government to intervene," Mbaine said.

All food stuffs prices have gone up following a long dry spell that hit the country last year affecting harvests. This week the Uganda Bureau of Statistics reported that higher food prices had increased headline inflation for May to 7.2% compared to the 6.8% recorded in April.


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