Why sugar prices have shot up
Dar es Salaam. The Sugar Board of Tanzania (SBT) has blamed the sharp increase in sugar prices in recent weeks on hoarding by “unscrupulous” traders.
Sugar prices have risen exponentially in most parts of the country from between Sh2,500 and Sh2,800 to Sh3,500 and Sh4,500 in just one month.
Sugar politics is not new in Tanzania, where the country’s four factories are able to produce about 360,000 tonnes annually against domestic demand of about 670,000 tonnes.
The deficit is filled by imports, with SBT issuing import permits to the four manufacturers.
At a time the world is grappling with the Covid-19 pandemic, some wholesalers have reportedly bought and stashed away huge stocks, assuming that importing the commodity would be difficult.
SBT director general Kenneth Bengesi told The Citizen yesterday that matters were made worse by the fact that manufacturers opted to conduct maintenance much earlier than May due to heavy rains.
Also, heavy rains reduced sucrose levels in sugarcane, forcing factories to temporarily suspend production.
“Traders speculated, and bought all the sugar from factories. They hoarded it in their warehouses so that they can release it when prices rise. They thought that due to Covid-19, it would be difficult for imports to trickle in, and that is precisely why prices have gone up...they have created an artificial shortage,” Prof Bengesi said.
It has also been speculated that some traders were hoarding the product so they can sell it at higher prices when demand rises significantly during the holy month of Ramadhan, which starts later this month.
However, Prof Bengesi said the government has taken precautionary measures, and imported sugar has already arrived at Dar es Salaam Port.
Offloading of the consignment began on Wednesday, and the commodity will enter the market from today. This is expected to push prices down to between Sh2,400 and Sh3,000 per kilogramme.
Prof Bengesi warned that the government would take stern measures – including revoking licences – against traders hoarding sugar.
Industry and Trade minister Innocent Bashungwa said yesterday that the country was not facing an acute shortage of sugar.
“The government has issued import permits for a total of 40,000 tonnes of sugar to four companies that produce the commodity locally, and each company will import 10,000 tonnes. Part of what has been imported is already in the country, and its distribution has already started,” he said.
Prof Bengesi added that imported sugar would plug the gap until June when local production would start again.
He said the government, through SBT, was closely monitoring wholesalers who buy sugar from the four manufacturers that have been permitted to import the commodity.
