Tanzania invites investors into sugar sector

Tanzania is looking for more investors into sugar production so as to meet domestic demand for the commodity as well as generate a surplus for export.

Revelian Ngaiza, Acting Head of Private Sector Development Unit, in the Ministry of Agriculture, Food Security said this during the recent India Agribusiness forum hosted by Tanzania Chamber of Commerce, Industry and Agriculture, Tanzania Investment Center and Agriculture Council of Tanzania.

Tanzania is now looking for more investors into the said sector because demand is still high. “The sugarcane farming and processing capacity in Tanzania is very small and cannot meet the country’s annual demand for sugar.

“We invited the Indian investors to invest in sugarcane farming because Tanzania is endowed with an area of 94.5 million hectares of arable land of which 44 million are classified as suitable for agriculture,” he said

Apart from that Tanzania is also blessed with enormous water resources potential constituting rivers, lakes, and underground water sources for irrigation and other uses.

Apart from increasing the supply of sugar in the market and stabilising prices, the investment would create employment, as well as help the government in its efforts to implement Kilimo Kwanza Initiatives, he said.

Most sugarcane is grown in estates, owned by the processing factories as well as contract growers.

Despite major sugarcane estates in Morogoro, Kilombero Sugar Company and Mtibwa Sugar Estates as well as the Kagera Sugarcane Estates, the demand is higher than supply, with the gap filled by importation.

The major factors behind reduction in sugar production are the small plants engaged in production, drought coupled with poor irrigation infrastructures in the sugar estates, noted Ngaiza.

Tanzania’s sugar consumption stands at 480,000 tonnes per annum, but the four factories, namely the Tanganyika Plantation Company (TPC), Kilombero, Kagera and Mtibwa Sugar produce only 320,000 tonnes.

Last year, Tanzania’s sugar demand was more than 330,000 tonnes, while its production stood at 250,000 tonnes, creating a deficit of nearly 80,000 tonnes. The retail cost of sugar has risen to 2,500/= from 1,700/- per kilo in retail outlets.

Following shortage of the sweetener in the other East African Community partner states, sugar is smuggled there where it fetches higher prices.

The situation has led to shortage of item in the country, which many analysts say is behind the spiralling of the item’s wholesale, sub-wholesale and retail prices.

Kenya and Uganda are known to be facing an acute shortage of sugar that has prompted the smuggling of the sweetener from Tanzania, where the price is lower.

Cases of smuggling have been reported at various posts on Tanzania’s borders with her two neighbours, leading to sporadic price rises in the country.

While retailers in Tanzania are directed to sell a kilo of sugar at not more than 1,700/-, the current sub-whole price stands at between 87,000/- and 11,000/- per 50-kilo bag and the retail price at between 2,300/- and 2,500/- a kilo.

In Kenya a kilo of the item fetches Kshs 210, which at the current exchange rate is 3,570/-. In Uganda it is Ugsh. 6,000 (equivalent to 3,400/-) and in Burundi it is Burundi Franc 2000 (about to 3,100/-).

Reports received earlier this week gave Tarime District in Mara Region as the most notorious for sugar smuggling to Kenya, mainly through Sirari, Kubiterere, Kogaja and Borega.

Media reports from Kenya have it that sugar has become scarce after the closure of that country’s key sugar producing factories for mandatory annual maintenance.

The country now produces only two-thirds of its demand and imports the remaining one third.

From Uganda, it is reported on authority that the past three weeks have seen sugar prices shoot up to as high as Ush7,000 per kilo, making it difficult for the average shopper to access it.

Rationing has been introduced, restricting shoppers from buying more than two kilogrammes of the item, apparently to fight racketeers who were buying cheap from supermarkets and wholesalers and selling expensively to shoppers.

Source: ippmedia