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Tanzania government vows to take down sugar cartels in efforts to address shortage
Minister for Agriculture, Hussein Bashe addresses media editors at State House in Dar es Salaam on Thursday, February 22, 2024. PHOTO | STATE HOUSE
What you need to know:
- The Tanzanian sugar business is a bit protected, allowing only local producers to dominate the market while importation is permitted to fill a deficit and feed industrial consumers.
Dar es Salaam. The government is planning to make reforms in sugar trading by allowing importation as part of measures to address the recurring crisis around the highly consumed sweetener.
The Tanzanian sugar business is a bit protected, allowing only local producers to dominate the market while importation is permitted to fill a deficit and feed industrial consumers. However, minister for Agriculture Hussein Bashe said he will propose to amend the law to allow the importation of sugar, which is now putting Tanzania in crisis.
Mr Bashe, who was speaking during a press briefing at the Dar es Salaam State House on Thursday, February 22, said that the current sugar crisis is being accelerated by the local producers, whom he accused of sabotaging the supply chain
.“We will submit a bill for liberalising the sugar business so that the local producers can compete with imports. We have protected the producers for about 20 years, but that is not solving our sugar problems,” said Mr Bashe.“We will shake the big boys until we maintain the stability of the sugar supply,” he added.
Currently, Tanzania is facing shortages of sugar, which have soared prices from an average of Sh3,000 per kilogramme last November to Sh4,500 currently.
The situation prompted the government to issue permits for five factories to import 50,000 metric tonnes (10,000 metric tonnes each).
However, Mr Bashe said it was only two producers who managed to import 2,000 metric tonnes each, prompting the government to intervene by tasking its food reserve agency to import sugar.
“Some producers have not imported anything so far, and among those who imported, Kagera Sugar and Kilombero Sugar imported only 2,000 kilogrammes each,” said Mr Bashe.
“This is where irresponsibility starts. We have now told the National Food Reserve Agency (NFRA) to find a supplier who will continue importing sugar until the end of the season or when the situation stabilises,” he said.
Sugar is a national security issue that needs government intervention, he said, adding that the NFRA will have imported 60,000 metric tonnes by March 15 this year.
Tanzania’s sugar demand is estimated at 552,000 metric tonnes in the current season. In comparison, the local factories are projected to lower production from 460,000 metric tonnes last season to 445,000 metric tonnes due to disruptive rains influenced by El Nino conditions, according to the Sugar Board of Tanzania director general, Prof Kenneth Bengesi.
By February 21, the production had reached 352,000 metric tonnes, he said. The local sugar production had reached 460,000 metric tonnes last season, and it was expected to reach 555,000 metric tonnes this season.
However, the hopes were diminished by the El Nino rains, which have disrupted production since last December as the sugarcane farms were flooded with water and mud that blocked some harvesting machines.
Mr Bashe said if it were not for the heavy rains, Tanzania would produce sugar, which almost meets the local demands.
“If we had not intervened, the crisis would be bigger than what we experience today,” said Mr Bashe, accusing the factories of increasing prices when the shortage is biting.
Similar sentiments were expressed by Prof Bengesi, who said there is “strange behaviour” in the local sugar prices, which needed government interventions.
“When market forces of demand and supply fail, the government must intervene, especially in sectors with monopolies of business,” said Prof Bengesi.
Sugar producers react
Reacting to the government accusations, some sugar producers refused to comment, while others explained what was ongoing as far as the sugar importation was concerned.
The administrative executive of the TPC factory, Mr Jafari Ally, acknowledged that producers were granted permits to import sugar, but he said the importation process takes time.
“When you are permitted to import sugar, it doesn’t mean it will arrive on the same day. There are many processes involved. We import sugar from Brazil. Consider how long it takes for a ship to travel from Brazil to Tanzania,” he said.
According to him, the factory was granted permission to import sugar in early February of this year.
He emphasised that after receiving such permits, the companies must find a supplier and assess the quality and standards of the sugar to ensure it meets the Tanzanian market requirements before importing.
“All this takes time. There is no delay or hesitation. Some cargo has already started arriving, and others will arrive soon. We have been allowed to import 10,000 metric tonnes, and we will import exactly that amount,” he said.
On the other hand, the director of corporate affairs for Kilombero Sugar Company, Mr Derick Stanley, said since the government statement involved all producers, the issue should be addressed to the Tanzania Sugar Producers Association (TSPA).
The director of corporate affairs for Bakhresa Group, which owns the Bagamoyo Sugar Factory, Mr Hussein Sufiani, refused to comment on the issue.
Efforts to get the TSPA were not successful.
