Uganda's 2012 sugar production seen up 26 pct

Uganda's 2012 raw sugar production is forecast to rise 26 percent, boosted by expected good weather and higher cane supplies from outgrowers, an industry official said on Wednesday.

Wilberforce Mubiru, secretariat manager at Uganda Sugar Cane Technologists Association (USCTA), told Reuters the east African country would produce about 327,075 tonnes of sugar, up from last year's 259,413 tonnes.

"We don't expect a prolonged drought that we experienced in some of the cane growing areas last year," Mubiru said.

"Also the number of outgrowers supplying the various producers is ever growing and we expect bigger cane supply from them."

Drought and arson that destroyed 3,000 hectares at Uganda's second biggest sugar producer, Kinyara Sugar Works, depressed the 2011 sugar output by 25.9 percent from a forecast of 350,000 tonnes.

Last year's output was also significantly down from 2010's production of 292,051 tonnes.

In August last year Uganda said it would import 40,000 tonnes of duty-free sugar to ease a shortage caused by drought and a temporary closure of Kinyara.

Last month three major producers including Kinyara complained they had accumulated huge inventories of unsold sugar after stocks imported tax-free flooded the market.

The companies said the unsold stocks, then estimated at 37,500 tonnes, were disrupting their finances and jeopardising potential investments in the sector.

"Stocks at the three factories have even increased due to the availability of duty free sugar that was imported which is on the local market," Mubiru said.

Uganda consumes about 320,000 tonnes of raw sugar and the government says it is eager to attract investment in the sector to meet growing demand.

A plan to cut 7,100 hectares of virgin forest to give way to a sugar plantation has, however, provoked public anger with environmentalists saying the move would adversely affect rainfall patterns in the region.

source: reuters