THE country's sugar industry expects to largely target export markets in the next four years as more foreign agricultural investments flow in by 2016, a departure from the current situation where there is existence of sugar gap every year, authorities say.
Tanzania has been experiencing sugar shortages for a number of decades, but the country is now optimistic that it would turn its tide to become a net exporter of the product in the next four years, the sub-sector regulator has said.
The Sugar Board of Tanzania (SBT) has outlined nine projects whose implementation will see the country tripling its annual sugar production from the current estimate of 300,000 metric tonnes to 910,000 metric tonnes come 2016.
There are many underlying reasons why the sugar industry in sub-Saharan Africa (SSA) is diversifying into fuel and electrical power. Fuel from sugar cane is generated through the production of bio-ethanol, while power generation emanates from burning sugar cane residues, otherwise called bagasse.
Prime Minister Mizengo Pinda is expected to have an audience with regional commissioners and relevant stakeholders soon centring on the pricing of sugar.
The item is understood to be cheaper in Tanzania than in the rest of the East Africa region, but smuggling has disrupted supply lines and occasioned price hikes with little record.
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.
Zanzibar Sugar Factory Limited at Mahonda has been compelled to suspend production because of equipment malfunction resulting from gradual wear and tear.
Speaking during a recent sitting of the Isle’s House of Representatives, Trade, Industry and Marketing deputy minister Thuwaiba Kissasi, revealed that the factory has struggled to produce high-grade sugar since 2008.
The government has said that sugar prices are high because of high transport costs from production to market points.
Deputy minister for Industry, Trade and Marketing Lazaro Nyalandu told the House when responding to a basic question by Special Seats MP Regia Mtema (Chadema), who said Kilombero residents were buying Ilovo Sugar Company sugar at a high price despite the factory being in Kilombero District.
The Tanganyika Planting Company (TPC) raised sugar production to 78,000 tonnes in the 2008/09 season from 60,000 tonnes in 2007/08.
It produced 49,650 tonnes in 200/01, says chief executive officer Robert Baissac.The factory aims at increasing output to 80,000 tonnes a season. “After expanding the factory and plantations we are excepting to produce between 80,000 and 85,000 tonnes of sugar a year,” he says.
“The company has good infrastructure as well as sound relations between management and workers to enable it to achieve the goal,” he says.
Sh83 billion was invested between 2000 and 2004. Further investments were made in rehabilitating infrastructure and refurbishing staff quarters. TPC also provides nursery education, food and educational materials. It also pays fees for workers’ children who learn vocational training. However, poor rainfall is forcing the company to irrigate 7,800 hectares.
“Cane cultivation is difficult in new plantations due to water shortages and large quantities of sodium in the soil,” he laments. Such factors deter small-scale farmers from growing sugarcane.
TPC Limited, which was established 79 years ago, was registered in Denmark as A/S Tanganyika Planting Company Limited. It started production in 1936 with the capacity of 4,000 tonnes of sugar.
In June 1973, it was registered in Tanzania as TPC Ltd which was owned by Danish A.P. Moller.
In 1980, the government took it over. But as the economy was being reform, it was privatised to Sukari Investment Company Ltd (SIL) — a Mauritius-registered firm — which bought 75 per cent of shares in 2000.
SIL is owned by Deep River Beau Champ of Mauritius which own 60 per cent and Sucriere de la Reunion GQF of Reunion, which own 40 per cent.
By August 2009 TPC had 3,190 workers — 2,024 of them full-timers and the remaining temporary workers.
Meanwhile, 279,851 tonnes of sugar are produced a year in Tanzania.
However, Tanzania Sugar Board (TSB) director-general Mathew Kombe says as factories are being expanded output will reach 290,000 tonnes in 2009/10.
The country’s four major sugar factories in Moshi, Mtibwa, Kagera and Kilombero have a combined capacity of 400,000 tonnes annually while smaller plants can produce up to 2,000 tonnes. No reason has been given for companies’ production below capacity.
The Ministry of Industry, Trade and Marketing says sugarcane is grown on about 40,000 hectares. The industry employs over 40,000 people directly. TSB is surveying land for cultivating sugarcane on 8,000 more hectares, set up a factory and encourage outgrowers to plant the crop on 8,000 hectares.
source: thecitizen
Fiji's sugar cane industry, the country's second biggest earner, has been destroyed by torrential rain that has wiped out crops and battered the livelihood of 22,000 cane farmers.
Thousands of acres of cane have been destroyed by rising floodwaters that have washed away soil and fertiliser, leaving silt and rancid salt water in its wake.
``The result is this mess,'' said Bala Dass, from Fiji's Cane Growers Association, pointing to recently flooded crop, bent over and turning brown at the roots.
``It's going to take years to recover from this.
``I've seen many cyclones, many floods, but in the history of this country, this is the worst I've ever seen and the worst disaster for the industry.''
Sugar is second only to tourism as Fiji's biggest industry, bringing in more than $250 million from the three million tonne crushes annually, which is mostly sold to markets in the European Union.
Fiji has been able to get a good price for its crop under a preferential pricing system which favours small countries over bigger producers like Australia, Brazil and Thailand.
But the system will change to a single desk flat price this year after a decision by the World Trade Organisation.
Mr Dass says this lower price per tonne combined with the impact of the week-long flooding will bring the industry to its knees in the long-term.
``All the sugar cane growing areas in the west, north and centre, everywhere, were affected, and the crop is really going down, so the total loss to the industry is huge,'' he said.
He said farmers had been contacting him in tears, without money to feed their families, or rebuild their homes, many located in low-lying areas and swamped by water.
One farmer, Eminoni Natadra, told AAP his four-acre plot was dead after the storms. Asked what he would do next, he said, ``I have no idea''.
The association is awaiting a government response to requests for an emergency advance payment to help tide farmers over, as well as an aid package to cover the costs of more seeds and fertiliser.
But Mr Dass said the impact would be felt beyond Fiji's 22,000 cane farming families, with 25 per cent of the nation reliant on the industry.
``It's the farmers' total livelihood, their life, but it's also the backbone of the country, so we need to hope for better weather and a way out of this mess,'' he said.
Tanzania will this year access $8 million from the European Union as part of the support programme by the European Union for funding sugar producers.
The director of the Sugar Board of Tanzania, Mathew Kombe, told The EastAfrican the money is the second tranche for the year 2007/8 after the first disbursement of $7.96 million on the same programme.
Mr Kombe said the fund is part of the $233 million offered by the EU as an assistance package to 18 countries in the African, Caribbean and Pacific bloc (ACP) for 2007-2017 to address the impact of new lower prices in the European market.
“Another $2.8 million is in the pipeline for the same purpose for year 2010, and we expect $5.6 million after 2010. However, due to budgetary rules in the EU, this had not been decided as yet,” he said.
The EU strategy is important for countries such as Tanzania — whose sugar sector employs over 66,000 people direct and indirectly — since it will act as a cushion mechanism when the EU adapts the new price regime.
The new sugar price regime is a result of a political agreement reached by EU agriculture ministers late in 2006, restructuring the system of EU production quotas and reducing in price by 36 per cent over a period of four years.
Recently, Tanzania reviewed its National Adaptation Strategy for accessing funds from the EU support programme with sugar industries asking for $340 million to make them competitive.
However, the EU has said it can only manage to support Tanzania sugar sector to the tune of only $14 million through the period to 2013.
Although the National Adaptation Strategy was prepared in consultation with players in the sugar industry, the sector is still pessimistic, saying the amount offered by the EU is not enough for them to maintain their competitive edge.
Although Tanzania, being one of the beneficiary countries that negotiated the sugar protocol under the ACP bloc, didn’t get what it asked for, it will continue to benefit from other trade agreements such as Everything But Arms (EBA), which benefits Least Developed Countries.
During the transition period until this year, the EBA concession is gradually granting quota preferences and partial duty free access to sugar imports from the LDCs. All agriculture products are included in EBA, whose concessions came into effect in March 2001.
The European Commission says that the EU reforms in the sugar sector were necessary due to pressure from the World Trade Organisation as well as European consumers, who paid prices for sugar within the European market two to three times higher than world market prices.
According to negotiated agreements, in addition to support the adjustment to the new price regime, the EU will also open its markets.
This means that from 2009 onwards, all LDCs including Tanzania can export sugar to the EU without quota restrictions. Before, these amounts were limited to only 20,000 tonne.
Illegal importation of sugar is making the going tough to domestic producers, the executive Secretary of Tanzania Sugar Producers Association (TSPA), Ambassador Fadhili D. Mbaga has said.
Illicit sugar imports are often branded as unlicensed and undeclared commodities, which is being blamed for causing unfair competition and serious threat to the existence of domestic sugar industry.
Amb. Mbaga said for the last two years, domestic production has been ranging between 100,000 and 200,000 tonnes per year and the local producers were determined to increase production even further.
However, the local producers were concerned with continuation of unlicensed and undeclared sugar into the Tanzania market which distorted it.
His forecast is similar to that of the state- run Sugar Board of Tanzania (SBT) which in June said sugar production may rise by a fifth this season following improved rainfall and regional demand which spurred growers to plant more cane.
According to Tanzania Agricultural Trade Development Centre announcement this month, output might increase to 317,000 metric tonnes between June 2008 and March 2009, from 265,000 tonnes in the same period a year earlier.
Tanzania aims to produce 400,000 tons by 2010, while sugar imports for household consumption in Tanzania would probably fall to about 30,000 tons in 2008-09, from 50,000 tonnes last year.
However, both TSPA and SBT are concerned that licensing importation of sugar, which is done through SBT`s technical committee to which representatives of producers and importers are co-opted leaves much to be desired because all imports are handled at the port by Port Authorities and Tanzania Revenue Authority (TRA).
Licenced sugar importers are taxed 25 per cent while those importing without licenses are taxed 100 per cent and such licenses expire every month of June.
Nevertheless, there are illegal routes especially at border points which are used to smuggle in small quantities of sugar which are usually seized and confiscated by TRA.
SBT Director General, Mathew Kombe was quoted over the weekend saying that recent survey carried out by his Board at most strategic selling points throughout the country found out that at least 6,000 tonnes of sugar have been imported illegally per month since last September.
SBT was not issuing licences to private dealers to import sugar for the time being as all licences expired since last September.
How consignments were getting into the country remains a puzzle, according to Kombe.
Worst, the safety of the illegal imports could not be guaranteed, thus, posing health hazards to consumers.
During year 2009, said Amb. Mbaga, Tanzania`s producers plan to increase production to 300,000 tonnes following rehabilitation and expansion of the Kagera Sugar Company.
On the other hand, the small cane growers at Kilombero and Kagera sugar companies are expected to dramatically increase production and supply of sugarcanes to the two factories.
``We have had discussions with the government but with little success since we still see illegal sugar flooding the market`` Mbaga said.
He said that even the Tanzania Revenue Authority (TRA) has joined the fight against the unlicensed and undeclared sugar imports.
He, however, cautioned that the sector was not asking the government for total protection, but sort of governance that would ensure the business of imported sugar was clean one and was properly taxed.
Annually, as additional 70,000 tonnes is expected to be brought in by manufacturers for use in soft drinks, candies, cookies, juices and beers production.
Sugar rose to its highest in almost four months in London by Saturday on speculation that near-record crude-oil prices will spur demand for ethanol produced from cane.
White sugar for October delivery rose USD14, or 3.7 percent, to USD391.20 a metric ton on London`s Liffe exchange, the highest since March 3. The commodity added to a 20 percent gain last month that was the biggest since June 1989.
Records show that in 2000, Tanzania imported 92,415 metric tons of sugar valued at USD 21.1m while its sugar exports reached 18,007 metric tonnes worth USD 9.1m.
The Tanzania sugar sector is said to employ directly and indirectly more than 650,000people.
SOURCE: Guardian
This is not a company blog or website. The views and statements expressed in this blog are absolutely subjective. All content here is either copyrighted or by the mentioned news sources.
