By Bob Karashani, DAR ES
SALAAM Tanzania
Tanzanian sugar regulators are embroiled in a feud with producers as they seek to enforce price caps on the commodity, amid a nationwide shortage.
Retail sugar prices have gone
up twofold from an average of Tsh2,300 ($0.91) in November to between Tsh4,000
($1.58) and Tsh6,000 ($2.37) per kilogramme, with fingers being pointed at
factory owners, importers and traders for the artificial shortage.
Across the EAC, sugar prices
average about $1.30 per kilo in Kenya, despite a government waiver on import
duty from January last year; $1.35 in Uganda, $0.44 in Rwanda, $0.83 in
Burundi, $1.92 in DR Congo, $2.36 in South Sudan and $3.14 in Somalia.
In response to a public outcry
over the rising prices, the Sugar Board of Tanzania last month announced shop
price caps of between Tsh2,700 ($1.07) and Tsh3,200 ($1.27), depending on point
of sale within the country, which were to become effective on January 23 and
remain until June 30.
Industry players responded by
saying the prices were too low and would render their businesses unprofitable.
Tanzania’s seven main sugar factories have since halted or slowed down
production, exacerbating the shortage in retail shops while prices have remained
high.
This comes at a particularly
bad time for the Islamic community as Ramadhan approaches, a period when demand
for sugar is highest.
Agriculture Minister Hussein
Bashe has warned sugar producers and traders to desist from trying to force a
reversal of the price cap by lobbying government officials and ruling CCM party
politicians “behind the scenes”. He asserted that such methods would be
fruitless as “this is not a matter that can be resolved politically.”
“In this country, there are
only four people who can summon and question me about the price caps: the
President, the Vice-President, Prime Minister and Deputy Prime Minister,” Mr
Bashe said. “There is no one else who can cancel that decision.”
Earlier, in a January 24 post
on his X account, Mr Bashe invited industry stakeholders aggrieved with the
sugar board’s move on price cap to his office for consultations and “stop
looking for short-cuts.”
The seven major sugar
factories in Tanzania currently produce an average of 1,000 tonnes per day
against national requirements of 1,500 tonnes per day and 490,000 tonnes
annually, with the gap covered by imports.
The government’s target for
this year was 500,000 tonnes before the latest disruptions caused by rains.
Mr Bashe said on January 21
that the government would issue permits to local producers and traders to
import 100,000 tonnes of sugar immediately but warned against abusing the
permits by hoarding supplies to inflate prices.
“If the factory owners and
wholesalers continue to hoard supplies in order to push prices up, the
government will revoke its protection for them against sugar imports. We cannot
protect factories at the expense of consumers,” he said.
According to Mr Bashe, sugar
prices in the local market are expected to stabilise by mid-February and the
total import allocation to have arrived in the country by the end of February.
“The ministry will also
continue to assess the rain situation and damage caused to sugarcane farms
since we don’t want to import amounts of sugar that could kill local production
altogether,” he said.
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